Soluna(SLNH)与Applied Digital(APLD)签署Dorothy 3 50MW风电AI数据中心49/51合资认购协议，附764万股认股权证及终止补偿条款

----- form8-k.htm -----
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):
October 20, 2026
SOLUNA
HOLDINGS, INC.
(Exact name of Registrant as Specified
in Its Charter)
Nevada
001-40261
14-1462255
(State or Other Jurisdiction
of Incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
325
Washington Avenue Extension
Albany
,
New York
12205
(Address
of Principal Executive Offices)
(Zip
Code)
Registrant’s
Telephone Number, Including Area Code:
(516)
216-9257
N/A
(Former
Name or Former Address, if Changed Since Last Report)
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:
☐
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(s)
Name
of each exchange on which registered
Common
stock, par value $0.001 per share
SLNH
The
Nasdaq Stock Market LLC
9.0%
Series A Cumulative Perpetual Preferred Stock, par value $0.001 per share
SLNHP
The
Nasdaq Stock Market LLC
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
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.
On
October 20, 2026, Soluna Holdings, Inc. (the “Company”) and certain affiliates thereof entered into a Subscription Agreement
(as defined and discussed in further detail below) with certain affiliates of Applied Digital Corporation,
a Nevada corporation (“Applied”),
to
form a jointly owned company to develop a planned 50 megawatt Critical I.T. data center for artificial intelligence and high-performance
computing at Project Dorothy 3, the Company’s development site near Silverton (Briscoe County), Texas, and the Briscoe Wind Farm.
The
Subscription Agreement
On
October 20, 2026, the Company entered into a Subscription Agreement (the “Subscription Agreement”) with Soluna HPC D3 STX
HoldCo, LLC, a Delaware limited liability company and an indirect
wholly
owned subsidiary of the Company (“Soluna Investor”), Soluna STX Borrower HoldCo, LLC, a Delaware limited liability company
(“Soluna STX”), APLD Intermediate HoldCo, LLC, a Delaware limited liability company and direct, wholly owned subsidiary of
Applied (“Applied Guarantor”),
APLD
STX Holdings
LLC,
a Delaware limited liability company and an indirect
wholly
owned subsidiary of Applied (“Applied Investor”), STX JV Holdings LLC, a Delaware limited liability company and an
indirect
wholly owned subsidiary of Applied (the
“Project Company”), and Soluna DV Services, LLC, a Nevada limited liability company and wholly owned subsidiary of the Company
(the “Ground Lessee”). Pursuant to the Subscription Agreement, at the closing (the “Closing”) of the transactions
contemplated by the Subscription Agreement (the “Transactions”), Soluna Investor is obligated to subscribe for and acquire
common units representing 49% of the issued and outstanding membership interests of the Project Company, and Applied Investor is obligated
to subscribe for and acquire common units representing 51% of the issued and outstanding membership interests of the Project Company.
As consideration for issuance of Project Company common units to Soluna Investor, Ground Lessee, as landlord, and STX-01 LLC,
a wholly owned subsidiary of
the Project Company,
as tenant, will enter into the Ground Sublease (as defined below), with an attributed value to Soluna Investor, pursuant to the Subscription
Agreement, of $18,750,000. Additionally, Soluna STX will contribute STX JV Intermediate Holdings, LLC, a newly formed holding company
and wholly owned subsidiary of Soluna STX, to the Project Company. As consideration for issuance of Project Company common units to Applied
Investor, Applied Investor will contribute to the Project Company an amount in cash equal to $19,515,306, subject to a dollar-for-dollar
credit against such amount for amounts actually paid by Applied Investor or its affiliates prior to the Closing for certain development
work performed at the site of the Project (as defined below) or the procurement of certain long lead-time equipment on behalf of the
Project Company. Soluna Investor’s and Applied Investor’s obligations under the Subscription Agreement are guaranteed respectively
by the Company and Applied Guarantor.
The
Closing is expected to occur on or before December 1, 2026 (the “Outside Date”), subject to the satisfaction or waiver of
certain conditions set forth in the Subscription Agreement, including: (1) the absence of any law, order or injunction enacted, issued
or in effect that restrains, enjoins, prohibits or otherwise prevents the Transactions, and the absence of any action instituted or threatened
in writing by a governmental authority that would reasonably be expected to prevent or prohibit the Transactions; (2) the occurrence
of the Tax Abatement Vote (as defined in the Subscription Agreement), (3) the accuracy, as of the Closing, of the representations and
warranties made by each party in the Subscription Agreement in all respects, except for such inaccuracies as are de minimis in nature
and amount relative to the applicable representation and warranty taken as a whole; (4) the performance or compliance by each party,
in all material respects, with all obligations and covenants required to be performed or complied with by it at or prior to the Closing;
(5) the negotiation, execution and delivery by each party thereto of the agreements and other documents required to be executed and delivered
at or prior to the Closing, including the LLC Agreement (defined below) and the Ancillary Agreements (as defined below) (collectively,
the “Transaction Documents”); (6) the requisite internal approvals by ChronoScale Holdings Corporation,
a Nevada corporation (“ChronoScale”),
and
its applicable affiliate of the Data Center Lease (as defined below); (7) the requisite internal approvals by Applied, the Company and
each of their applicable affiliates of the Transaction Documents (including the LLC Agreement and the Ancillary Agreements); and (8)
the issuance of the Leasehold Title Policy (as defined in the Subscription Agreement) by the applicable title company. Either Soluna
Investor or Applied Investor may terminate the Subscription Agreement if the Closing has not occurred on or before the Outside Date,
except that if, as of such date, all conditions to the Closing have been satisfied or waived (other than those conditions that by their
nature are to be satisfied at the Closing and are then capable of being satisfied) other than the condition relating to (i) the Tax Abatement
Vote, then the Outside Date will automatically be extended, for one time only, by thirty (30) days, or (ii) the issuance of the Leasehold
Title Policy or delivery of Title Deliverables, then the Outside Date will automatically be extended, for one time only, by ten (10)
days, but in no event will the Outside Date extend beyond December 31, 2026.
As
of the date of this Current Report
Form
8-K, certain development work related to the Project has begun at the site of the Project and will continue through the Closing, and
certain equipment necessary for the development of the Project may be procured, in each case, at the costs and expense of Applied (collectively,
the “Funded Costs”). If the Closing fails to occur and the Subscription Agreement is terminated, Soluna
Investor
will be obligated to reimburse Applied
Investor
for
eighty percent (80%) of such Funded Costs, up to a maximum of $45 million, subject to a reimbursement schedule and interest as specified
in the Subscription Agreement, which obligation is guaranteed by the Company.
The
LLC Agreement
In
connection with the Subscription Agreement and the Transactions, at Closing, Soluna Investor and Applied Investor will also enter into
an Amended and Restated Limited Liability Company Agreement of the Project Company (the “LLC Agreement”), setting forth the
terms and conditions of the ownership, management and operation of the Project Company. The purpose of the Project Company is to, among
other things, acquire, own, construct, develop, operate, manage, lease and monetize the initial phase of a data center facility known
as “Dorothy 3A,” consisting of approximately 75 megawatts of gross capacity, or 50 megawatts of Critical I.T. capacity, in
Briscoe County, Texas (the “Project”). The LLC Agreement is expected to
contain customary representations and warranties of the parties
thereto. The terms of the LLC Agreement, when finalized, may differ from those currently contemplated by the Subscription Agreement.
The
Lease Agreements
In
connection with the Subscription Agreement, the LLC Agreement and the Transactions
,
at Closing, the Ground Lessee will enter into a 99-year Ground Sublease Agreement (the “Ground Sublease”) with STX-01 LLC,
a wholly-owned subsidiary of the Project Company (“Tenant”), pursuant to which Tenant will lease from the Ground Lessee,
all right, title and interest of Ground Lessee in the land leased under that certain Ground Lease to be entered into between Soluna Dorothy
3 Energy ServiceCo, LLC and Soluna DV BNSF Energy HoldCo, LLC (collectively, the “Fee Owner”), as landlords, and the Ground
Lessee, as tenant, covering certain real property located in Briscoe County, Texas (the “Fee Ground Lease”), upon which the
Project will be developed. The terms of the Ground Sublease and the Fee Ground Lease, when finalized, may differ from those currently
contemplated by the Subscription Agreement.
The
Warrant
The
Subscription Agreement contemplates that, at the Closing, the Company will issue to Applied or an affiliate thereof (the “Holder”)
in a private placement (“Private Placement”), a Common Stock Purchase Warrant (the “Warrant”) to purchase up
to 7,644,444 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), at an exercise
price of $0.74 per share. The Warrant is anticipated to be exercisable at any time on or after the issue date and on or prior to the
seven-year anniversary thereof. The Warrant is anticipated to be subject to adjustment in the event of certain stock dividends and distributions,
stock splits, stock combinations, reclassifications or similar events affecting the Common Stock. In the event of certain corporate transactions,
the Holder is anticipated to be entitled to receive, upon exercise of the Warrant, the kind and amount of securities, cash or other property
that the holders would have received had they exercised the Warrant immediately prior to such transaction. The
Holder is expected to agree that, for the period beginning on the issue date and ending on the earlier of the twelve-month anniversary
thereof and the date on which the volume weighted average price of the Common Stock equals or exceeds $10.00 per share, it will not,
directly or indirectly, engage in any short sale of the Common Stock or otherwise hedge its economic exposure to the Common Stock.
The Warrant is not expected to entitle the holders thereof
to any voting rights or any of the other rights or privileges to which holders of Common Stock are entitled. The Warrant is expected
to be issued and sold without registration under the Securities Act of 1933, as amended (the “Securities Act”), or state
securities laws in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act promulgated thereunder and in reliance
on similar exemptions under applicable state laws.
The
form of the Warrant has not been finalized as of the date of this Current Report
Form
8-K, and the issuance of the Warrant is conditioned upon the occurrence of the Closing.
The
Registration Rights Agreement
The
Subscription Agreement contemplates that, at the Closing, the Company will enter into a Registration Rights Agreement (the “Registration
Rights Agreement”) with the Holder, pursuant to which the Company would agree to file a registration statement with the Securities
and Exchange Commission (the “SEC”)
to
register the resale or other disposition of the Warrant and the shares of Common Stock issuable upon exercise of the Warrant (together,
the “Registrable Securities”). It is expected that the Company will be required to prepare and file a registration statement
with the SEC on or prior to
30
days following the Closing
(the
“Filing Deadline”), and to have the registration statement declared effective as soon
as reasonably practicable but in no event later than
30
days of the Filing Deadline if the SEC does not review such registration statement. It is expected that the Company will also be required
to use its commercially reasonable
efforts
to keep any such registration statement continuously effective until (i) the date that all of the Registrable Securities have been publicly
sold by the Holder, (ii) the date that all of the Registrable Securities have been previously sold in accordance with Rule 144 or (iii)
such time as all of such Registrable Securities may be sold by the Holder without any restriction pursuant to Rule 144, including holding
period, volume or manner-of-sale restrictions pursuant to Rule 144 and without the requirement for the Company to be in compliance with
the current public information requirement under Rule 144.
The
form of the Registration Rights Agreement has not been finalized as of the date of this Current Report
Form 8-K, and entry into the Registration Rights Agreement
is conditioned upon the occurrence of the Closing.
The
Ancillary Agreements
The
Subscription Agreement contemplates that, at or prior to the Closing, the parties, certain of their respective affiliates and certain
third parties will enter into a number of additional agreements (the “Ancillary Agreements”) as set forth in the Subscription
Agreement, including (i) the Fee Ground Lease, (ii) the Ground Sublease, (iii) a data center lease between Tenant, as landlord, and ChronoScale
or an affiliate thereof, as tenant, (the “Data Center Lease”), (iv) an engineering, procurement and construction contract
relating to the Project, (v) certain shared services agreements among the parties, (vi) assignment and assumption agreements with respect
to certain contracts relating to the Project, (vii) the Warrant, and (viii) the Registration Rights Agreement. Other than the form of
assignment and assumption agreement, the forms of the Ancillary Agreements have not been finalized as of the date of this Current
Report
Form 8-K. During the period from the date
of the Subscription Agreement until the earlier of the Closing and the termination of the Subscription Agreement (the “Interim
Period”), the parties have agreed to use commercially reasonable efforts to negotiate in good faith to finalize the Ancillary Agreements.
The execution and delivery of the Ancillary Agreements in form and substance reasonably acceptable to the parties thereto, Soluna Investor
and Applied Investor and the requisite internal approvals by Applied, the Company and each of their applicable affiliates
of the Transaction Documents (including the LLC Agreement and the Ancillary Agreements) are conditions to each party’s obligation
to consummate the Closing, and the requisite internal approvals by ChronoScale and its applicable
affiliate are a condition to the obligations of Applied Investor and Applied Guarantor to consummate the Closing. If
the
parties are unable to agree upon final forms of the Ancillary Agreements, the Closing may not occur. The terms of the Ancillary Agreements
and LLC Agreement, when finalized, may differ from those currently contemplated by the Subscription Agreement.
The
foregoing description of the Subscription Agreement is not
complete
and is
qualified
in its
entirety
by reference to the full text of the Subscription Agreement. A copy of the executed Subscription Agreement is filed as Exhibit 10.1
to this Current Report on Form 8-K and is incorporated herein by reference.
Item
3.02 Unregistered Sales of Equity Securities.
The
information set forth in Item 1.01 of this Current Report on Form 8-K with respect to the Warrant and the shares of Common Stock underlying
the Warrant is incorporated by reference herein.
Safe
Harbor Statement
This
announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S.
Private Securities Litigation Reform Act of 1995. These forward-looking statements include all statements, other than statements of historical
fact, regarding the Company’s current views and assumptions with respect to future events regarding their respective businesses,
including the ability to complete the closing of the transactions contemplated by the Subscription Agreement on the proposed terms and
schedule, and the satisfaction of the conditions precedent to the closing of the transactions contemplated by the Subscription Agreement,
including approval of a tax abatement; the formation of the Project Company; the negotiation and execution of a definitive lease with
ChronoScale and definitive power supply agreements; the development, financing, construction, energization, and operation of the Project;
whether the development of the Project may be more difficult, time-consuming or costly than expected, whether the expected benefits of
the Project will occur, and the Company’s development pipeline. These forward-looking statements can be identified by terminology
such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,”
“believes,” “estimates,” “confident,” and similar statements. The Company may also make written or
oral forward-looking statements in their periodic reports filed with the SEC, in press releases and other written materials, and in oral
statements made by their officers, directors, or employees to third parties. Statements that are not historical facts, including but
not limited to statements about the Company’s beliefs and expectations, are forward-looking statements. Forward-looking statements
involve inherent risks and uncertainties, including but not limited to, failure to negotiate final forms of the Ancillary Agreements
in form and substance acceptable to Soluna Investor, Applied Investor and the parties thereto; failure to obtain the required approvals
of the Company, Applied and ChronoScale, and their applicable affiliates; failure to satisfy other closing conditions to the transaction
or to complete the transaction on anticipated terms and timing (or at all); the risk that the Company may be required to reimburse substantial
amounts to Applied Investor following a termination of the Subscription Agreement; risks that the Project may not obtain any required
regulatory approval; the risk that disruptions from the transaction will harm business plans and operations; significant transaction
costs, or difficulties in connection with the transaction and/or unknown or inestimable liabilities; restrictions during the pendency
of the transaction that may impact the ability to pursue certain business opportunities or strategic transactions; potential litigation
associated with the transaction; the occurrence of any event that could give rise to the termination of the proposed transaction; the
applicable company’s ability to complete construction of its data center campuses as planned; changes to AI and high performance
computing infrastructure needs and their impact on future plans; costs related to the high performance computing operations and strategy;
the applicable company’s ability to timely deliver any services required in connection with completion of installation under lease
agreements; the applicable company’s ability to raise additional capital to fund the ongoing datacenter construction and operations;
the applicable company’s dependence on principal customers; power or other supply disruptions and equipment failures; the inability
to comply with regulations, developments and changes in regulations; cash flow and access to capital; maintenance of third party relationships;
and conditions in the debt and equity capital markets. Further information regarding such risks and uncertainties is included in the
Company’s most recently filed Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. All information provided in this
Current Report
Form
8-K is as of the date of this Form 8-K, the Company undertakes no duty to update such information, except as required under applicable
law.
Item
9.01. Financial Statements and Exhibits
(d)
Exhibits.
Exhibit No.
Description
10.1
Subscription
Agreement, dated as of October 20, 2026, by and among Soluna Holdings, Inc., Soluna HPC D3 STX HoldCo, LLC, Soluna STX Borrower HoldCo,
LLC, APLD Intermediate HoldCo LLC, APLD STX Holdings LLC,
STX JV Holdings LLC and Soluna DV Services, LLC.
104
Cover
Page Interactive Data File (embedded within the Inline XBRL document).
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
SOLUNA
HOLDINGS, INC.
Date:
October 21, 2026
By:
/s/
Michael Picchi
Michael
Picchi
Chief
Financial Officer
(principal
financial officer)

----- ex10-1.htm -----
EX-10.1
2
ex10-1.htm
EX-10.1
Exhibit
10.1
CONFIDENTIAL
Execution
Version
SUBSCRIPTION
AGREEMENT
by
and among
STX
JV HOLDINGS LLC,
Soluna
HPC D3 STX HOLDCO, LLC,
Soluna
STX BORROWER HOLDCO, LLC,
Soluna
DV SERVICES, LLC,
Soluna
HOLDINGS, INC.,
APLD
STX Holdings LLC
,
and
APLD
INTERMEDIATE HOLDCO LLC
Dated
as of October 20, 2026
TABLE
OF CONTENTS
Page
ARTICLE
I
PURCHASE
AND SALE OF INTERESTS; CLOSING
Section
1.1
Purchase
and Sale of Interests
4
Section
1.2
Closing
5
Section
1.3
Closing
Actions
5
Section
1.4
Post-Closing
Reorganization
7
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES WITH RESPECT TO THE COMPANY
Section
2.1
Issuance
of Interests
7
Section
2.2
Organization
and Power
7
Section
2.3
Power
and Authority
7
Section
2.4
Binding
Obligations
8
Section
2.5
No
Breach
8
Section
2.6
Capitalization;
Subsidiaries
8
Section
2.7
Brokerage
8
Section
2.8
No
Advice
8
Section
2.9
No
Solicitation
9
Section
2.10
Tax
Matters
9
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF THE SAIL INVESTOR, STX HoldCo AND THE GROUND LESSEE
Section
3.1
Investment
9
Section
3.2
Organization
and Power
10
Section
3.3
Power
and Authority
11
Section
3.4
Binding
Obligations
11
Section
3.5
No
Breach
11
Section
3.6
Consents
11
Section
3.7
Sanctions
and Unlawful Activity Regulation
12
Section
3.8
Brokerage
12
Section
3.9
No
Advice
12
Section
3.10
No
Solicitation
12
Section
3.11
Real
Property and Environmental
12
Section
3.12
Power
and Operations
13
Section
3.13
Contracts
14
Section
3.14
Tax
Classification
15
Section
3.15
STX
Intermediate
15
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF THE ANCHOR INVESTOR
Section
4.1
Investment
15
Section
4.2
Organization
and Power
17
Section
4.3
Power
and Authority
17
Section
4.4
Binding
Obligations
17
Section
4.5
No
Breach
17
Section
4.6
Consents
17
Section
4.7
Sanctions
and Unlawful Activity Regulation
18
Section
4.8
Brokerage
18
Section
4.9
No
Advice
18
Section
4.10
No
Solicitation
18
Section
4.11
Contracts
18
Section
4.12
Tax
Classification
19
ARTICLE
V
REPRESENTATIONS
AND WARRANTIES OF THE SAIL GUARANTOR
Section
5.1
Organization
and Power
19
Section
5.2
Power
and Authority
19
Section
5.3
Binding
Obligations
19
Section
5.4
No
Breach
19
Section
5.5
Sanctions
and Unlawful Activity Regulation
20
Section
5.6
No
Advice
20
ARTICLE
VI
REPRESENTATIONS
AND WARRANTIES OF THE ANCHOR GUARANTOR
Section
6.1
Organization
and Power
20
Section
6.2
Power
and Authority
20
Section
6.3
Binding
Obligations
20
Section
6.4
No
Breach
21
Section
6.5
Sanctions
and Unlawful Activity Regulation
21
Section
6.6
No
Advice
21
ARTICLE
VII
LIABILITY
Section
7.1
Survival
21
Section
7.2
No
Special Damages
21
Section
7.3
Deductible
21
Section
7.4
Aggregate
Liability of the Parties
22
Section
7.5
Exclusive
Remedy
22
ARTICLE
VIII
PRE-CLOSING
COVENANTS
Section
8.1
No
Action
22
Section
8.2
Transaction
Documents
23
Section
8.3
Efforts
23
Section
8.4
Right
to Access the Land and Develop the Project
24
Section
8.5
Indemnity
25
Section
8.6
Funded
Costs
25
Section
8.7
Title,
Survey and Zoning Due Diligence
26
2
ARTICLE
IX
CONDITIONS
Section
9.1
Conditions
to Obligations of All Parties
27
Section
9.2
Conditions
to Obligations of the Sail Investor, the Sail Guarantor, STX HoldCo and the Ground Lessee
28
Section
9.3
Conditions
to Obligations of the Anchor Investor and the Anchor Guarantor
28
ARTICLE
X
TERMINATION
Section
10.1
Termination
29
Section
10.2
Effect
of Termination
30
ARTICLE
XI
GUARANTY
Section
11.1
Sail
and Anchor Guarantor
31
Section
11.2
Guaranteed
Obligations
31
Section
11.3
Liability
of Each Guarantor
31
Section
11.4
Obligations
of Guarantors
32
ARTICLE
XII
MISCELLANEOUS
Section
12.1
Further
Assurances
32
Section
12.2
Non-Recourse
32
Section
12.3
Construction
32
Section
12.4
Governing
Law; Jurisdiction; Venue
33
Section
12.5
Waiver
of Jury Trial
33
Section
12.6
Headings
33
Section
12.7
Notices
33
Section
12.8
Expenses
35
Section
12.9
Public
Announcements
35
Section
12.10
Successors
and Assigns
35
Section
12.11
Confidentiality
36
Section
12.12
Entire
Agreement
36
Section
12.13
Amendment
and Waiver
36
Section
12.14
Severability
36
Section
12.15
No
Third-Party Beneficiaries
36
Section
12.16
Specific
Performance
36
Section
12.17
Counterparts
37
Section
12.18
Definitions
37
EXHIBIT
A
MEMBERSHIP
INTERESTS
A-1
EXHIBIT
B
FORM
OF ASSIGNMENT AND ASSUMPTION AGREEMENT
B-1
EXHIBIT
C
LAND
C-1
EXHIBIT
D
PROHIBITED
ACTIONS
D-1
SCHEDULE
1.1
ASSIGNED
PROJECT CONTRACTS
S-1
SCHEDULE
2.6
COMPANY
SUBSIDIARIES
S-2
SCHEDULE
3.6
SOLUNA
CONSENTS
S-3
SCHEDULE
3.11
ENVIRONMENTAL
REPORT
S-4
SCHEDULE
4.6
APPLIED
CONSENTS
S-5
3
STX
JV HOLDINGS LLC
SUBSCRIPTION
AGREEMENT
This
SUBSCRIPTION AGREEMENT (this “
Agreement
”), dated as of the 20th day of October, 2026, is entered into by and among
STX JV Holdings LLC, a Delaware limited liability company (the “
Company
”), Soluna HPC D3 STX HoldCo, LLC, a Delaware
limited liability company (the “
Sail Investor
”), Soluna STX Borrower HoldCo, LLC
,
a Delaware limited liability
company
(“STX HoldCo”),
Soluna DV Services, LLC, a Nevada limited liability company (the “
Ground Lessee
”),
Soluna Holdings, Inc., a Nevada corporation (the “
Sail Guarantor
”), APLD STX Holdings LLC, a Delaware limited liability
company (the “
Anchor Investor
”, and together with the Sail Investor, the “
Investors
”, and each,
an “
Investor
”), APLD Intermediate HoldCo LLC, a Delaware limited liability company (the “
Anchor Guarantor
”,
and together with the Sail Guarantor, the “
Guarantors
”, and each, a “
Guarantor
”, and together with
the Company, the Investors, STX HoldCo
,
the Ground Lessee, the “
Parties
”).
R
E C I T A L S
WHEREAS,
the Company was formed as a Delaware limited liability company pursuant to the Delaware Limited Liability Company Act, 6 Del. C. §
18-101 et seq., as amended (the “
Act
”), by the filing of its Certificate of Formation with the Secretary of State
of the State of Delaware;
WHEREAS,
in connection with the transactions contemplated hereby, each Investor desires to subscribe for and purchase from the Company, and the
Company desires to issue to each Investor, certain Common Units (the “
Interests
”), such Interests having the rights,
preferences, privileges, limitations, restrictions and/or obligations set forth in the Operating Agreement (as defined herein), in each
case, at the Closing and on the terms and subject to the conditions set forth herein; and
WHEREAS,
at the Closing,
STX HoldCo
shall contribute to the Company, for no consideration, all of the issued and outstanding limited liability
company interests of STX JV Intermediate Holdings, LLC, a Delaware limited liability company (“
STX Intermediate
”)
and a direct wholly owned subsidiary of
STX HoldCo
(the “
STX Intermediate Interests
”).
NOW
THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the parties hereto hereby agree
as follows:
ARTICLE
I
PURCHASE
AND SALE OF INTERESTS; CLOSING
Section
1.1
Purchase and Sale of Interests
. At the Closing, subject to the terms and conditions hereof, the Company shall issue to
each Investor, and each Investor shall initially subscribe for and purchase from the Company, the number of Common Units set forth opposite
such Investor’s name on
Exhibit A
hereto under the heading “Common Units” (the “
Subscription
”).
Each Investor hereby agrees and acknowledges that the Interests subscribed for and purchased by the Investors pursuant to this Agreement
shall be subject to the terms and conditions of the Operating Agreement. The Parties hereby acknowledge and agree that (a) each Subscription
and each actual or deemed transfer of assets by an Investor to the Company pursuant to this Agreement is intended to be treated for U.S.
federal and applicable state and local income Tax purposes as a contribution governed by Section 721(a) of the U.S. Internal Revenue
Code of 1986, as amended (the “
Code
”) and (b) the Sail Guarantor is intended to be treated, for U.S. federal and applicable
state and local income Tax purposes as contributing the STX Intermediate Interests, through intermediate entities, to the Sail Investor,
and the Sail Investor is intended to be treated as contributing the STX Intermediate Interests to the Company, and each Party shall report
consistently with such treatment for all U.S. federal (and applicable state and local) income Tax consequences, except as otherwise required
by a “determination” within the meaning of Section 1313(a) of the Code.
4
Section
1.2
Closing
. Subject to the terms and conditions of this Agreement, the consummation of the transactions contemplated hereby
(the “
Closing
”) shall take place remotely via the electronic exchange of executed documents on the date that is three
(3) Business Days after the date on which all of the conditions to the Closing set forth in
Article IX
have been satisfied or
waived (other than those conditions that by their nature are to be satisfied at the Closing), or at such other time, date and place as
the Parties may mutually agree in writing. The date on which the Closing occurs shall be the “
Closing Date
”.
Section
1.3
Closing Actions
. At or prior to the Closing, subject to the terms and conditions hereof and in consideration of the Subscription,
the Parties shall take or cause to be taken the following actions (collectively, the “
Closing Actions
”), as applicable:
(a)
Payment of Subscription Amount
. Each Investor shall pay to the Company, in cash by wire transfer of immediately available funds
to an account or accounts designated in writing by the Company prior to the Closing Date, the amount in U.S. dollars set forth opposite
such Investor’s name on
Exhibit A
hereto under the heading “Subscription Amount” (the “
Subscription
Amount
”);
(b)
Operating Agreement
. The Company, the Anchor Investor and the Sail Investor shall each execute and deliver, or cause to be executed
and delivered, to the other applicable Parties the
Operating Agreement;
(c)
Fee Ground Lease
. The Ground Lessee shall execute and deliver, or cause to be executed and delivered, to the other applicable
Parties a Ground Lease Agreement, dated as of or prior to the Closing Date, by and between Soluna Dorothy 3 Energy ServiceCo, LLC and
Soluna DV BNSF Energy HoldCo, LLC (individually or collectively, as the context may require, the “
Fee Owner
”), as
landlords, and the Ground Lessee, as tenant, in form and substance reasonably acceptable to the parties thereto and the Investors, as
determined in each of their good-faith discretion (the “
Fee Ground Lease
”);
(d)
Ground Sublease
. The Ground Lessee and the Company shall each execute and deliver, or cause to be executed and delivered, to the
other applicable Parties a Ground Sublease Agreement, dated as of the Closing Date, by and between the Ground Lessee, as landlord, and
STX-01 LLC, a Delaware limited liability company (“
JV Entity Propco
”), as tenant, in form and substance reasonably
acceptable to the parties thereto and the Investors, as determined in each of their good-faith discretion (the “
Ground Sublease
”);
(e)
Assignment Agreements
. The Investors, as applicable, shall assign to JV Entity Propco the contracts set forth on
Schedule 1.1
hereto under the respective heading for such Investor (such contracts assigned by the Anchor Investor, the “
Anchor Assigned
Contracts
” and such contracts assigned by the Sail Investor, the “
Sail Assigned Contracts
”), in each case,
pursuant to an Assignment and Assumption Agreement, dated as of the Closing Date, in form and substance attached hereto as
Exhibit
B
(collectively, the “
Assignment Agreements
”);
(f)
STX Intermediate Interests Assignment
.
STX HoldCo
shall contribute, assign, transfer and deliver to the Company all of
the STX Intermediate Interests, free and clear of all Liens, pursuant to a short-form assignment of limited liability company interests,
dated as of the Closing Date, in form and substance reasonably acceptable to the parties thereto and the Investors, as determined in
each of their good-faith discretion (the “
STX Intermediate Interests Assignment
”);
5
(g)
ChronoScale Lease
. The Anchor Investor shall execute and deliver, or cause to be executed and delivered, to the other applicable
Parties a Data Center Lease for the Land, dated as of the Closing Date, by and between JV Entity Propco, as landlord, and an indirect
wholly-owned subsidiary of ChronoScale Holdings Corporation, as tenant, in form and substance reasonably acceptable to the parties thereto
and the Investors, as determined in each of their good-faith discretion (the “
ChronoScale Lease
”);
(h)
Hypergate Contract
. The Anchor Investor shall execute and deliver, or cause to be executed and delivered, to the other applicable
Parties an Engineering, Procurement and Construction Contract, dated as of or prior to the Closing Date, by and between the Anchor Investor
and Hypergate, LLC (“
Hypergate
”), in form and substance reasonably acceptable to the parties thereto and the Investors,
as determined in each of their good-faith discretion (the “
Hypergate Contract
”);
(i)
Warrants
. The Sail Guarantor shall issue to the Anchor Guarantor, in a private placement, a common stock purchase warrant to purchase
7,644,444 shares of the Sail Guarantor’s common stock, par value $0.001 per share, at an exercise price per share of $0.74, in
form and substance reasonably acceptable to the parties thereto and the Investors, as determined in each of their good-faith discretion
(the “
Warrant
”);
(j)
Registration Rights Agreement
. The Anchor Guarantor and the Sail Guarantor shall each execute and deliver a Registration Rights
Agreement, dated as of the Closing Date, by and between the Anchor Guarantor and the Sail Guarantor, in form and substance reasonably
acceptable to the parties thereto and the Investors, as determined in each of their good-faith discretion (the “
Registration
Rights Agreement
”);
(k)
Shared Services Agreements
. The Investors shall execute and deliver, or cause to be executed and delivered, to the other applicable
Parties, certain Shared Services Agreements, each dated as of the Closing Date, in form and substance reasonably acceptable to the parties
thereto and the Investors, as determined in each of their good-faith discretion (collectively, the “
Shared Services Agreements
”);
(l)
Officer’s Certificate
. (A) The Anchor Investor and the Anchor Guarantor shall deliver to the other Parties a certificate
executed by a duly authorized officer of the Anchor Investor and the Anchor Guarantor, dated as of the Closing Date, certifying that
the conditions set forth in
Section 9.2(a)
and
Section 9.2(b)
, in each case, with respect to the Anchor Investor, the Anchor
Guarantor and their respective Affiliates have been satisfied; (B) the Sail Investor, the Ground Lessee,
STX HoldCo
and the Sail
Guarantor shall deliver to the other Parties a certificate executed by a duly authorized officer of the Sail Investor, the Ground Lessee,
STX HoldCo
and the Sail Guarantor, dated as of the Closing Date, certifying that the conditions set forth in
Section 9.3(a)
and
Section 9.3(b)
, in each case, with respect to the Sail Investor, the Ground Lessee,
STX HoldCo
, the Sail Guarantor
and their respective Affiliates, have been satisfied; and (C) the Company shall deliver to the other Parties a certificate executed by
a duly authorized officer of the Company, dated as of the Closing Date, certifying that the conditions set forth in
Section 9.2(a)
,
Section 9.2(b)
,
Section 9.3(a)
and
Section 9.3(b)
, in each case, with respect to the Company, have been satisfied;
(m)
IRS Form W-9
. The Sail Investor shall deliver to the Company a duly completed and executed IRS Form W-9;
(n)
Funded Costs Statement
. The Anchor Investor shall have delivered to the Sail Investor, not less than five (5) Business Days prior
to Closing, a statement reasonably acceptable to the Sail Investor, setting forth in detail the Funded Costs, including the underlying
support and calculation thereof (the “
Funded Costs Statement
”);
6
(o)
Title Deliverables
. The Sail Investor and the Ground Lessee shall execute and deliver, or cause the Fee Owner and their other
applicable Affiliates to execute and deliver, to the Title Company (with copies to the Anchor Investor) the Title Deliverables in accordance
with, and to the extent required under,
Section 8.7(c)(i)
; and
(p)
Power Agreement Estoppels
. The Sail Investor shall have delivered to the Company an estoppel certificate or confirmatory letter
(reasonably satisfactory for obtaining financing) from each of Lighthouse Electric Cooperative, Inc. and Briscoe Wind Farm, LLC with
respect to each agreement for the supply or delivery of power to the Project to which such Person is a party, in each case in form and
substance reasonably satisfactory to the Anchor Investor.
Section
1.4
Post-Closing Reorganization
. Immediately following the Closing, the Company shall contribute, assign, transfer and deliver
all of the issued and outstanding equity interests of JV Entity Propco to STX Intermediate, with the result that STX Intermediate shall
be the sole member of JV Entity Propco as an intermediate holding company, and each of the Investors shall reasonably cooperate to take,
or cause to be taken, all actions reasonably necessary to effect such contribution. This transaction is intended to be disregarded for
U.S. federal and applicable state and local income Tax purposes.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES WITH RESPECT TO THE COMPANY
The
Company hereby represents and warrants to each Investor that the following representations are true, correct and complete:
Section
2.1
Issuance of Interests
. At the Closing, the Interests shall be validly issued, fully paid and nonassessable, except as
otherwise provided under Applicable Law or the Operating Agreement, and free of restrictions on transfer other than restrictions on transfer
under the Operating Agreement, applicable state and federal securities laws and liens or encumbrances created by or imposed by the Investors
or their respective Affiliates. Except to the extent set forth in the Operating Agreement, there shall be no contractual preemptive rights,
rights of first refusal, rights of first offer or similar restrictions with respect to the issuance of the Interests. Assuming the accuracy
of the representations of each Investor set forth herein, the offer, sale or issuance of any of the Company’s equity securities,
and the offer, sale and issuance of the Interests hereunder, shall not require registration under the Securities Act or any applicable
state securities laws.
Section
2.2
Organization and Power
. The Company is a limited liability company, duly organized, validly existing and in good standing
under the laws of the State of Delaware. JV Entity Propco is a limited liability company, duly organized, validly existing and in good
standing under the laws of the State of Delaware.
Section
2.3
Power and Authority
. Each of the Company and its applicable subsidiaries has the power and authority to execute and deliver
this Agreement and each of the Transaction Documents to which it is a party, to perform its obligations hereunder and thereunder, and
to consummate each of the transactions contemplated hereby and thereby. Subject to the receipt of the APLD Approvals, the execution and
delivery of this Agreement and each of the Transaction Documents to which any of the Company or its applicable subsidiaries is a party
by the Company or its applicable subsidiaries and the consummation by the Company or its applicable subsidiaries of the transactions
contemplated hereby and thereby have been duly authorized by all necessary action on its part under its Organization Documents, and no
other proceedings on the part of the Company or its applicable subsidiaries are necessary to authorize this Agreement, the Transaction
Documents or to consummate the transactions contemplated hereby or thereby.
7
Section
2.4
Binding Obligations
. This Agreement has been, and each of the Transaction Documents to which the Company is a party shall
be (when executed and delivered by the Company), duly and validly executed and delivered by the Company. This Agreement and each of the
Transaction Documents to which the Company is a party constitute (or will constitute, when executed and delivered by the Company) the
valid and legally binding obligations of the Company (assuming the due authorization, execution and delivery of this Agreement and such
Transaction Documents by the Investors and the other parties hereto and thereto, as applicable), enforceable in accordance with their
terms and conditions, except as the enforceability thereof may be limited by any applicable bankruptcy, reorganization, insolvency or
other laws affecting creditors’ rights generally or by general principles of equity.
Section
2.5
No Breach
. The execution, delivery and performance of this Agreement or the Transaction Documents by the Company, and
the consummation by the Company of the transactions contemplated hereby and thereby, do not (a) subject to the receipt of the APLD Approvals,
result in any breach of, constitute (with or without consent or notice or lapse of time or both) a default under or result in a violation
of the provisions of (i) the Organization Documents of the Company, or (ii) any material Contract to which the Company is bound, (b)
violate any law or any judgment, injunction, decree, order, ruling, or award rendered by or subject to any Governmental Authority to
which the Company is subject, or (c) require the Company to obtain any permit or provide any notice to or make any filing with any Governmental
Authority under the provisions of any Applicable Law to which the Company is subject, except in each case of clause
(a)(ii)
,
(b)
or
(c)
, where the breach, default, violation, failure to obtain a permit, give notice, make a filing or obtain consent would not
be material to the Company.
Section
2.6
Capitalization; Subsidiaries
. As of the date of this Agreement, the Anchor Investor shall own, hold of record, and be
the owner of 100% of the issued and outstanding equity interests of the Company. Such issued and outstanding equity interests (i) are
owned beneficially and of record by the Anchor Investor free and clear of all Liens (other than restrictions on transfer under the Company’s
Organization Documents and the federal and state securities laws), (ii) have been duly authorized and validly issued, (iii) are fully
paid and nonassessable and (iv) are not certificated. No equity interest of the Company has been issued in violation of any law (including
applicable federal and state securities laws) or any preemptive or similar right. Except as set forth in the Operating Agreement, (a)
there are no outstanding options, warrants, call rights, stock appreciation, phantom equity rights, virtual stock or other equity or
equity-based compensation award, plan or arrangement, or purchase rights, subscription rights, preemptive rights, rights of first refusal,
registration rights, conversion rights, exchange rights, or other Contracts that require the Company or any of its Subsidiaries to issue,
deliver, grant, convert, exchange, sell, or otherwise cause to become outstanding any of its membership interests or other equity securities;
(b) there are no Contracts restricting the transfer of, or requiring the registration for sale of, any equity interests in the Company;
and (c) there are no voting trusts or agreements, membership agreements, pledge agreements, buy-sell agreements, rights of first refusal,
preemptive rights, stock appreciation rights, redemption or repurchase rights, anti-dilutive rights or proxies relating to the equity
interests in the Company. The Company is not subject to any obligation (contingent or otherwise) to subscribe for, purchase, redeem,
repurchase or otherwise acquire or retire any of its membership interests or capital stock. The Subsidiaries of the Company are listed
on
Schedule 2.6
. Each Subsidiary is wholly owned by the Company.
Section
2.7
Brokerage
. The Company has not retained, engaged or entered into any Contract with any Person who is or will be entitled
to any brokerage commissions, finders’ fees or similar compensation in connection with the transactions contemplated by this Agreement
or any Transaction Document for which the Company would be liable.
Section
2.8
No Advice
. The Company has been represented by, or has had the opportunity to consult with, its own legal, tax, accounting,
financial and other advisers in connection with this Agreement, the Operating Agreement, the Interests and the transactions contemplated
hereby and thereby. The Company acknowledges that none of the Investors or any of their respective Affiliates or Representatives has
provided the Company with legal, tax, accounting, financial or investment advice in connection with the transactions contemplated by
this Agreement.
8
Section
2.9
No Solicitation
. Neither the Company, nor any of its officers, managers, employees, agents or members, acting on its behalf,
has, either directly or indirectly, including through a broker or finder, (a) engaged in any general solicitation or (b) published any
advertisement, in each case, in connection with the offer and sale of the Interests.
Section
2.10
Tax Matters
.
(a)
The Company and each of its Subsidiaries have filed, or have caused to be filed, all Tax returns and reports required to be filed, and
all Taxes (including in their respective capacities as withholding agents) levied or imposed upon or with respect to the Company and
each of its Subsidiaries or their properties, income or assets have been paid in full.
(b)
The Company and each of its Subsidiaries are, will be, as of immediately prior to the Closing, and at all times since its formation has
been, disregarded as an entity separate from its owner (the Anchor Investor) for U.S. federal income tax purposes.
(c)
The Company and each of its Subsidiaries is resident for Tax purposes solely in the United States and does not have a permanent establishment
or other taxable presence outside of the United States.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF THE SAIL INVESTOR, STX HoldCo AND THE GROUND LESSEE
The
Sail Investor, the Ground Lessee and
STX HoldCo
, as applicable, severally and not jointly, hereby represent and warrant to the
Company and the Anchor Investor that the following representations are true, correct and complete:
Section
3.1
Investment
.
(a)
The Sail Investor is acquiring its Interests for investment and for the Sail Investor’s own account, not as a nominee or agent,
and not with a view to, or with the intent to, resell or distribute any part thereof. The Sail Investor has no present intention of selling,
granting any direct participation in, or otherwise distributing the same. By executing this Agreement, the Sail Investor further represents
that the Sail Investor does not presently have any contract, undertaking, agreement or arrangement with any Person to sell, transfer
or grant participations to such Person or to any third Person, with respect to any of its Interests.
(b)
The Sail Investor understands that (i) the offering and issuance of its Interests hereby are intended to be exempt from registration
under the Securities Act and all applicable state and foreign securities laws, (ii) the offering and issuance of its Interests have not
been registered under the Securities Act or any applicable state or foreign securities laws, and the Company has made no assurances that
its Interests will be registered under the Securities Act or any applicable state or foreign securities laws, and, therefore, its Interests
cannot be sold, transferred or otherwise disposed of unless such sale, transfer or other disposition is registered under the Securities
Act and all applicable state and foreign securities laws or an exemption from such registration is available, (iii) the sale, transfer
or other disposition of its Interests will be restricted by the terms of the Operating Agreement, (iv) there can be no assurance the
Sail Investor will be able to sell, transfer or dispose of its Interests, (v) its Interests are “restricted securities” under
applicable federal, state or foreign securities laws and that, pursuant to these laws, the Sail Investor may be required to hold its
Interests indefinitely and the Sail Investor may be required to continue to bear the economic risk of complete loss of investment in
its Interests unless and until they are registered and qualified, or an exemption from such registration and qualification requirements
is available, (vi) the Company has no obligation to register or qualify its Interests for resale under this Agreement and the Transaction
Documents, and (vii) if an exemption from registration or qualification is available, it may be conditioned on various requirements including,
but not limited to, the time and manner of sale, the holding period for its Interests, and on requirements relating to the Company which
are outside of the Sail Investor’s control, and which the Company may not be able to satisfy.
9
(c)
The Sail Investor’s financial situation is such that the Sail Investor can afford to bear the economic risk of holding its Interests
acquired hereunder for an indefinite period of time, and the Sail Investor can afford to suffer the complete loss of the investment in
its Interests.
(d)
The Sail Investor’s knowledge and experience in financial and business matters are such that the Sail Investor is capable of evaluating
the merits and risks of the investment in its Interests, or the Sail Investor has been advised by a representative possessing such knowledge
and experience.
(e)
The Sail Investor understands that its Interests acquired hereunder are a speculative investment which involves a high degree of risk
of loss of the entire investment therein, that there are, or will be, substantial restrictions on the transferability of its Interests
under Applicable Law and as set forth in the Operating Agreement to which the Sail Investor shall be a party, and that for an indefinite
period following the Closing Date there will be no public market for its Interests and that, accordingly, it may not be possible for
the Sail Investor to sell its Interests in case of emergency or otherwise. The Sail Investor understands that the Company has made no
assurances that a public market will ever exist for its Interests.
(f)
The Sail Investor and the Sail Investor’s Representatives have been given the opportunity to examine documents and to ask questions
of, and to receive answers from, the Company and its Affiliates and Representatives concerning the terms and conditions of the acquisition
of its Interests and related matters and to obtain all additional information which the Sail Investor and the Sail Investor’s Representatives
deem necessary. The Sail Investor has conducted its own independent review and analysis of the Company, its Interests, the Operating
Agreement and the transactions contemplated by the Transaction Documents and has not relied on, and is not relying on, any statement,
information, projection, forecast or representation or warranty of any nature, express or implied, made or purported to be made by or
on behalf of the Company or any of its Affiliates or Representatives, except as expressly set forth in this Agreement (as qualified by
the Disclosure Schedule), the Transaction Documents and any certificate delivered in connection therewith.
(g)
The Sail Investor is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D under the Securities
Act. The Sail Investor has such knowledge and experience in financial and business matters such that the Sail Investor is capable of
evaluating the merits and risks of the acquisition of its Interests and an investment in the Company. The Sail Investor is not subject
to any of the “
Bad Actor
” disqualifications described in Securities Act Rule 506(d)(1), subsections (i) through (viii).
Section
3.2
Organization and Power
. The Sail Investor is a limited liability company, duly organized, validly existing and in good
standing under the laws of the State of Delaware. The Ground Lessee is a limited liability company, duly organized, validly existing
and in good standing under the laws of the State of Nevada.
STX HoldCo
is a limited liability company, duly organized, validly
existing and in good standing under the laws of the State of Delaware.
10
Section
3.3
Power and Authority
. The Sail Investor, the Ground Lessee and
STX HoldCo
each have the power and authority to execute
and deliver this Agreement and each of the Transaction Documents to which it is a party, to perform its obligations hereunder and thereunder,
and to consummate each of the transactions contemplated hereby and thereby. Subject to the receipt of the Soluna Approvals, the execution
and delivery of this Agreement and each of the Transaction Documents by the Sail Investor, the Ground Lessee and
STX HoldCo
, as
applicable, and the consummation by the Sail Investor, the Ground Lessee and STX HoldCo of the transactions contemplated hereby and thereby
have been, or, in the case of the Transaction Documents, will be as of the Closing, duly authorized by all necessary action on the part
of the Sail Investor, the Ground Lessee or
STX HoldCo
under their respective Organization Documents, and no other proceedings
on their respective part are necessary to authorize this Agreement, the Transaction Documents or to consummate the transactions contemplated
hereby or thereby.
Section
3.4
Binding Obligations
. This Agreement has been, and each of the Transaction Documents to which the Sail Investor, the Ground
Lessee or
STX HoldCo
is a party shall be (when executed and delivered by such party), duly and validly executed and delivered.
This Agreement and each of the Transaction Documents to which the Sail Investor, the Ground Lessee or
STX HoldCo
is a party constitute
(or will constitute, when executed and delivered by the Sail Investor, the Ground Lessee or
STX HoldCo
, as applicable) the valid
and legally binding obligations of the Sail Investor, the Ground Lessee and
STX HoldCo
, as applicable (assuming the due authorization,
execution and delivery of this Agreement and such Transaction Documents by the Company and the other parties hereto and thereto, as applicable),
enforceable in accordance with their terms and conditions, except as the enforceability thereof may be limited by any applicable bankruptcy,
reorganization, insolvency or other laws affecting creditors’ rights generally or by general principles of equity.
Section
3.5
No Breach
. The execution, delivery and performance of this Agreement or the Transaction Documents by the Sail Investor,
the Ground Lessee and
STX HoldCo
, and the consummation by the Sail Investor, the Ground Lessee and
STX HoldCo
of the transactions
contemplated hereby and thereby, do not (a) result in any breach of, constitute (with or without consent or notice or lapse of time or
both) a default under or result in a violation of the provisions of (i) subject to the receipt of the Soluna Approvals, the Organization
Documents of the Sail Investor, the Ground Lessee or
STX HoldCo
, or (ii) any Sail Assigned Contract or any other material Contract
to which the Sail Investor, the Ground Lessee or STX HoldCo is bound, or (b) violate any material law or any judgment, injunction, decree,
order, ruling, or award rendered by or subject to any Governmental Authority to which the Sail Investor, the Ground Lessee or STX HoldCo
is subject, except in each case of clause (a)(ii) or (b), where the breach, default, violation, failure to obtain a permit, give notice,
make a filing or obtain consent would not (x) be material to the Sail Investor or
STX HoldCo
, (y) materially and adversely affect
its Interests, the STX Intermediate Interests, the Land, the Project, or any Sail Assigned Contract, or (z) otherwise prevent, materially
delay or materially impair the ability of the Sail Investor, the Ground Lessee or STX HoldCo to consummate the transactions contemplated
by this Agreement or the Transaction Documents.
Section
3.6
Consents
. The execution, delivery and performance of this Agreement or any of the Transaction Documents by the Sail Investor,
the Ground Lessee and STX HoldCo, and the consummation by the Sail Investor, the Ground Lessee and STX HoldCo of the transactions contemplated
hereby and thereby, do not require any consent, approval, authorization, permit, order, filing, registration or qualification of or with
any Governmental Authority or any other Person, except as set forth on
Schedule 3.6
hereto under the respective heading for the
Sail Investor, the Ground Lessee and STX HoldCo, each of which has been obtained or made and is in full force and effect, and except
where the failure to obtain a permit, order, registration or qualification, give notice, make a filing or obtain consent, approval or
authorization would not prevent, materially delay or materially impair the ability of the Sail Investor, the Ground Lessee or STX HoldCo
to consummate the transactions contemplated by this Agreement or the Transaction Documents.
11
Section
3.7
Sanctions and Unlawful Activity Regulation
. None of the Sail Investor, the Ground Lessee, STX HoldCo nor any of their
respective beneficial owners, controlling persons or Affiliates is a Blocked Person, Restricted Person or is the subject or target of
any Sanctions. The funds used by the Sail Investor to acquire its Interests are not derived from unlawful activity and do not constitute
proceeds of any activity that would violate any applicable Anti-Money Laundering Laws, Sanctions or Anti-Corruption Laws. The Sail Investor
is not acquiring its Interests for the direct or indirect benefit of any Person in violation of any Anti-Money Laundering Laws, Sanctions
or Anti-Corruption Laws.
Section
3.8
Brokerage
. None of the Sail Investor, the Ground Lessee, STX HoldCo nor any of their respective Affiliates has retained,
engaged or entered into any Contract with any Person who is or will be entitled to any brokerage commissions, finders’ fees or
similar compensation in connection with the transactions contemplated by this Agreement or any Transaction Document for which the Sail
Investor, the Ground Lessee or STX HoldCo would be liable.
Section
3.9
No Advice
. The Sail Investor, the Ground Lessee and STX HoldCo have been represented by, or have had the opportunity to
consult with, their own legal, tax, accounting, financial and other advisers in connection with this Agreement, the Operating Agreement,
its Interests and the transactions contemplated hereby and thereby. The Sail Investor, the Ground Lessee and STX HoldCo each acknowledge
that none of the Company, the Anchor Investor nor any of their Affiliates or Representatives has provided the Sail Investor, the Ground
Lessee or STX HoldCo with legal, tax, accounting, financial or investment advice in connection with the transactions contemplated by
this Agreement.
Section
3.10
No Solicitation
. None of the Sail Investor, the Ground Lessee, STX HoldCo nor any of their respective officers, managers,
employees, agents or members acting on its behalf, has, either directly or indirectly, including through a broker or finder, (a) engaged
in any general solicitation or (b) published any advertisement, in each case, in connection with the offer and sale of its Interests.
Section
3.11
Real Property and Environmental
.
(a)
The Fee Owner has good and valid fee simple title in the Land, free and clear of any Liens, except for Permitted Liens. The Fee Owner
is in possession of the Land, and the Ground Lessee has no Knowledge of any contractual or legal restrictions that preclude or restrict
in any material way the ability to use the Land for the purposes for which it is currently being used or intended to be used. The Sail
Investor and the Ground Lessee have made available to the Company true, complete, correct and current copies of (i) all deeds and other
instruments by which the Sail Investor or the Fee Owner acquired its interests in the Land and (ii) all title reports, surveys, title
policies, Liens and appraisals with respect to the Land in the possession or control of the Sail Investor, Fee Owner or the Ground Lessee.
(b)
As of the Closing, the Ground Lessee will possess a good and valid leasehold interest in the land demised under the Fee Ground Lease,
free and clear of any Liens, except for Permitted Liens.
(c)
Neither the Fee Owner nor the Ground Lessee has granted any outstanding options, rights of first offer or rights of first refusal to
purchase or lease the Land or any portion thereof or interest therein. Neither the Fee Owner nor the Ground Lessee has leased, subleased,
licensed or otherwise granted to any Person the right to use or occupy any portion of the Land, except pursuant to this Agreement, the
Fee Ground Lease and the Authorizations. The Ground Lessee has adequate rights of ingress and egress with respect to the Land. To the
Knowledge of the Sail Investor and the Ground Lessee, none of Sail Investor, Fee Owner or any of their Affiliates has received any material
complaints from any neighboring property owners or users of the Land since the date that Fee Owner acquired the Land. Neither the Sail
Investor, Fee Owner nor the Ground Lessee is indebted to any contractor, laborer, mechanic, materialman, architect or engineer for any
work, labor or services performed or rendered or for any materials supplied or furnished in connection with the Land, other than amounts
for which the Anchor Investor or any of its Affiliates is responsible under the Anchor Assigned Contracts.
12
(d)
The Fee Owner has not received written notice of any condemnation, expropriation, eminent domain or similar action pending with respect
to the Land, and, to the Knowledge of the Fee Owner and the Ground Lessee, there are no such actions threatened with respect to the Land.
No zoning ordinance or land-use regulation applicable to the Land prohibits its present or intended use and, to the Knowledge of the
Fee Owner, the Sail Investor and the Ground Lessee, there are no pending or threatened proceeding which could result in a modification
of any applicable zoning ordinances or land-use regulations.
(e)
To the Knowledge of the Fee Owner, the Sail Investor, and the Ground Lessee, the Land is not in material violation of any applicable
Environmental Laws, except as may be disclosed in the reports set forth on Schedule 3.11 attached hereto.
(f)
Except as may be disclosed on, or in the reports set forth on Schedule 3.11 attached hereto, solely with respect to the Land, each of
the Fee Owner, the Sail Investor, and the Ground Lessee: (i) to its Knowledge, has been in material compliance with all applicable Environmental
Laws; (ii) has, to its Knowledge, obtained and complied with all material Environmental Permits required under Environmental Laws as
of the Closing, each such Environmental Permit being in full force and effect or subject to a timely renewal application; (iii) does
not have Knowledge that it has caused any Release of any Regulated Substances on, upon, into or from the Land that requires reporting,
investigation or remediation under applicable Environmental Laws; (iv) has not received any written notice, report, order, claim, directive
or other information relating to any actual or alleged violation of Environmental Law(s) or any Release of Regulated Substances that
requires reporting, investigation or remediation under Environmental Law or the filing, commencement, pendency or threat of any action
or order relating thereto; (v) does not have Knowledge of any facts or circumstances that would reasonably be expected to form the basis
of liability under Environmental Laws for the Fee Owner, the Sail Investor, or the Ground Lessee; and (vi) has made available to the
Company copies of (A) the most recent, if any, Phase I or II environmental site assessment of the Land and (B) any other material environmental
assessments, reports, investigations, audits, and other documents to the extent disclosing any unresolved and material non-compliance
with or liabilities under any Environmental Law concerning the Land that are not disclosed in the most recent Phase I or II environmental
site assessment of the Land.
Section
3.12
Power and Operations
.
(a)
The Ground Lessee has obtained all necessary agreements and approvals to receive 100 megawatts of power delivered to Oncor’s Tule
Canyon Substation, and such 100 megawatts of delivered capacity is firm, available and not subject to the completion of any further interconnection
studies, approvals or other conditions. The Ground Lessee represents and warrants that Oncor is currently conducting additional load
interconnection studies to evaluate the feasibility of serving an additional 50 megawatts through the Tule Canyon Substation, which,
subject to completion of the required studies, and any applicable system upgrades, would increase the site’s total capacity up
to 150 megawatts;
provided
, that only such additional 50 megawatts shall be conditioned upon the completion of such studies and
applicable system upgrades.
(b)
The Ground Lessee has all necessary rights and agreements in place to use all private, shared electrical infrastructure interconnected
to the Tule Canyon Substation as necessary to distribute up to 100 megawatts of retail electricity to data center customers. Of the 100
megawatts of unconditional delivered capacity described in
Section 3.12(a)
, 75 megawatts are available to be allocated to the
Project pursuant to the Ground Lease and will be so allocated upon execution of the Ground Lease.
13
(c)
The Ground Lessee has obtained all necessary retail electric service agreements with the applicable retail electric service provider,
including Lighthouse Electric Cooperative, Inc., to purchase up to 150 megawatts of power delivered to the ERCOT-Polled Settlement Meter
located at the Tule Canyon Substation, to serve data center loads;
provided
, that such retail service has been obtained with respect
to the first 100 megawatts (and not subject to the completion of any further interconnection studies, approvals or other conditions)
and is premised upon completion of all required load interconnection studies and any applicable system upgrades that may be required,
solely with respect to the additional 50 megawatts described in
Section 3.12(a)
.
(d)
The Ground Lessee has entered into wholesale supply agreements to purchase up to 150 megawatts of behind-the-meter generation from Briscoe
Wind Farm, LLC, for use by the Ground Lessee to serve data center loads electrically interconnected to the Tule Canyon Substation.
(e)
At or prior to the Closing, the Sail Investor and the Ground Lessee shall have delivered to the Investors true, correct and complete
copies of any agreement with Oncor, Lighthouse Electric Cooperative, Inc. and Briscoe Wind Farm, LLC, and each agreement governing the
ownership, use, operation or allocation of capacity on the shared electrical infrastructure described in
Section 3.12(b)
, in each
case, relating to the supply, delivery or distribution of power to the Land or the Project (collectively, the “
Power Agreements
”),
including all amendments, supplements and side letters thereto. At the time of the Closing, each Power Agreement is in full force and
effect and is a legal, valid and binding obligation of the parties thereto, and neither the Ground Lessee nor any of its Affiliates party
thereto, nor, to the Knowledge of the Sail Investor and the Ground Lessee, any other party thereto, is in default or breach thereunder,
and no event has occurred that, with notice or lapse of time or both, would constitute such a default or breach.
Section
3.13
Contracts
. Each Sail Assigned Contract is (or will be, when executed and delivered by the Sail Investor, the Ground Lessee,
the Sail Guarantor, or any of their respective Affiliates) valid and binding on the Sail Investor, the Sail Guarantor, or the applicable
Affiliate party thereto, and is (or will be, when executed and delivered by the Sail Investor, the Ground Lessee, the Sail Guarantor,
or any of their respective Affiliates) in full force and effect and enforceable in accordance with its terms, except for such failures
to be valid, binding and enforceable or in full force and effect as would not (x) be material to the Sail Investor, (y) adversely affect
its Interests, the Land, the Project, or any Sail Assigned Contract, or (z) prevent, materially delay or materially impair the ability
of the Sail Investor or the Ground Lessee to consummate the transactions contemplated by this Agreement or the Transaction Documents,
subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors’ rights and remedies
generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding
at law or in equity). (i) None of the Sail Investor, the Ground Lessee, the Sail Guarantor nor any of their respective Affiliates, or,
to the Knowledge of the Sail Investor and the Ground Lessee, no other party to any Sail Assigned Contract, is in breach of, or default
under, any Sail Assigned Contract; (ii) no event has occurred that, with notice or lapse of time or both, would constitute a breach of
or default under any Sail Assigned Contract by the Sail Investor, the Ground Lessee, the Sail Guarantor, any of their respective Affiliates,
or, to the Knowledge of the Sail Investor and the Ground Lessee, any other party thereto; and (iii) none of the Sail Investor, the Ground
Lessee, the Sail Guarantor nor any of their respective Affiliates has received written notice from any other party to any Sail Assigned
Contract that such other party intends to terminate, not renew or renegotiate the terms of such Sail Assigned Contract, except, in each
case, for such breaches, defaults, disputes, terminations, non-renewals or renegotiations as would not (x) be material to the Sail Investor,
(y) adversely affect its Interests, the Land, the Project, or any Sail Assigned Contract, or (z) prevent, materially delay or materially
impair the ability of the Sail Investor or the Ground Lessee to consummate the transactions contemplated by this Agreement or the Transaction
Documents.
14
Section
3.14
Tax Classification
. As of the Closing, the Sail Investor will be an association taxable as a corporation for U.S. federal
income Tax purposes, and STX HoldCo will be disregarded as an entity separate from the Sail Guarantor for U.S. federal income Tax purposes.
Section
3.15
STX Intermediate
.
(a)
STX Intermediate is a limited liability company, duly organized, validly existing and in good standing under the laws of the State of
Delaware, and has the power and authority to own its assets and conduct its business as presently conducted. STX Intermediate has no
Subsidiaries and does not own, directly or indirectly, any equity interest in, or any right or obligation to acquire any equity interest
in, any other Person.
(b)
STX HoldCo has full right, power, authority and legal capacity to contribute, assign, transfer and deliver the STX Intermediate Interests
to the Company, and upon such contribution at the Closing the Company shall acquire good and valid title to the STX Intermediate Interests,
free and clear of all Liens (other than restrictions on transfer arising under applicable federal and state securities laws and the Organization
Documents of STX Intermediate). No consent, approval, authorization or waiver of, or notice to, any Person (other than STX HoldCo) is
required in connection with the contribution of the STX Intermediate Interests.
(c)
STX Intermediate (i) is not a party to, or bound by, any Contract other than its governing documents, (ii) has no liabilities or obligations
of any kind, whether accrued, absolute, contingent or otherwise, (iii) has not conducted any business or operations or employed any employees,
and (iv) does not own any assets other than cash and cash equivalents. Since its formation, STX Intermediate has not incurred any indebtedness
and there is no action pending or, to the Knowledge of the Sail Investor, threatened against STX Intermediate.
(d)
STX Intermediate is, and at all times since its formation has been, disregarded as an entity separate from the Sail Guarantor for U.S.
federal income Tax purposes. STX Intermediate has filed, or caused to be filed, all Tax returns and reports required to be filed by it,
and all Taxes levied or imposed upon or with respect to STX Intermediate or its properties, income or assets have been paid in full.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF THE ANCHOR INVESTOR
The
Anchor Investor hereby represents and warrants to the Company and the Sail Investor that the following representations are true, correct
and complete:
Section
4.1
Investment
.
(a)
The Anchor Investor is acquiring its Interests for investment and for the Anchor Investor’s own account, not as a nominee or agent,
and not with a view to, or with the intent to, resell or distribute any part thereof. The Anchor Investor has no present intention of
selling, granting any direct participation in, or otherwise distributing the same. By executing this Agreement, the Anchor Investor further
represents that the Anchor Investor does not presently have any contract, undertaking, agreement or arrangement with any Person to sell,
transfer or grant participations to such Person or to any third Person, with respect to any of its Interests.
15
(b)
The Anchor Investor understands that (i) the offering and issuance of its Interests hereby are intended to be exempt from registration
under the Securities Act and all applicable state and foreign securities laws, (ii) the offering and issuance of its Interests have not
been registered under the Securities Act or any applicable state or foreign securities laws, and the Company has made no assurances that
its Interests will be registered under the Securities Act or any applicable state or foreign securities laws, and, therefore, its Interests
cannot be sold, transferred or otherwise disposed of unless such sale, transfer or other disposition is registered under the Securities
Act and all applicable state and foreign securities laws or an exemption from such registration is available, (iii) the sale, transfer
or other disposition of its Interests will be restricted by the terms of the Operating Agreement, (iv) there can be no assurance the
Anchor Investor will be able to sell, transfer or dispose of its Interests, (v) its Interests are “restricted securities”
under applicable federal, state or foreign securities laws and that, pursuant to these laws, the Anchor Investor may be required to hold
its Interests indefinitely and the Anchor Investor may be required to continue to bear the economic risk of complete loss of investment
in its Interests unless and until they are registered and qualified, or an exemption from such registration and qualification requirements
is available, (vi) the Company has no obligation to register or qualify its Interests for resale under this Agreement and the Transaction
Documents, and (vii) if an exemption from registration or qualification is available, it may be conditioned on various requirements including,
but not limited to, the time and manner of sale, the holding period for its Interests, and on requirements relating to the Company which
are outside of the Anchor Investor’s control, and which the Company may not be able to satisfy.
(c)
The Anchor Investor’s financial situation is such that the Anchor Investor can afford to bear the economic risk of holding its
Interests acquired hereunder for an indefinite period of time, and the Anchor Investor can afford to suffer the complete loss of the
investment in its Interests.
(d)
The Anchor Investor’s knowledge and experience in financial and business matters are such that the Anchor Investor is capable of
evaluating the merits and risks of the investment in its Interests, or the Anchor Investor has been advised by a representative possessing
such knowledge and experience.
(e)
The Anchor Investor understands that its Interests acquired hereunder are a speculative investment which involves a high degree of risk
of loss of the entire investment therein, that there are, or will be, substantial restrictions on the transferability of its Interests
under Applicable Law and as set forth in the Operating Agreement to which the Anchor Investor shall be a party, and that for an indefinite
period following the Closing Date there will be no public market for its Interests and that, accordingly, it may not be possible for
the Anchor Investor to sell its Interests in case of emergency or otherwise. The Anchor Investor understands that the Company has made
no assurances that a public market will ever exist for its Interests.
(f)
The Anchor Investor and the Anchor Investor’s Representatives have been given the opportunity to examine documents and to ask questions
of, and to receive answers from, the Company and its Affiliates and Representatives concerning the terms and conditions of the acquisition
of its Interests and related matters and to obtain all additional information which the Anchor Investor and the Anchor Investor’s
Representatives deem necessary. The Anchor Investor has conducted its own independent review and analysis of the Company, its Interests,
the Operating Agreement and the transactions contemplated by the Transaction Documents and has not relied on, and is not relying on,
any statement, information, projection, forecast or representation or warranty of any nature, express or implied, made or purported to
be made by or on behalf of the Company or any of its Affiliates or Representatives, except as expressly set forth in this Agreement,
the Transaction Documents and any certificate delivered in connection therewith.
(g)
The Anchor Investor is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D under the Securities
Act. The Anchor Investor has such knowledge and experience in financial and business matters such that the Anchor Investor is capable
of evaluating the merits and risks of the acquisition of its Interests and an investment in the Company. The Anchor Investor is not subject
to any of the “
Bad Actor
” disqualifications described in Securities Act Rule 506(d)(1), subsections (i) through (viii).
16
Section
4.2
Organization and Power
. The Anchor Investor is a limited liability company, duly organized, validly existing and in good
standing under the laws of the State of Delaware.
Section
4.3
Power and Authority
. The Anchor Investor has the power and authority to execute and deliver this Agreement and each of
the Transaction Documents to which it is a party, to perform its obligations hereunder and thereunder, and to consummate each of the
transactions contemplated hereby and thereby. Subject to the receipt of the APLD Approvals, the execution and delivery of this Agreement
and each of the Transaction Documents by the Anchor Investor and the consummation by the Anchor Investor of the transactions contemplated
hereby and thereby have been, or, in the case of the Transaction Documents, will be as of the Closing, duly authorized by all necessary
action on the part of the Anchor Investor under its Organization Documents, and no other proceedings on its part are necessary to authorize
this Agreement, the Transaction Documents or to consummate the transactions contemplated hereby or thereby.
Section
4.4
Binding Obligations
. This Agreement has been, and each of the Transaction Documents to which the Anchor Investor is a
party shall be (when executed and delivered by the Anchor Investor), duly and validly executed and delivered. This Agreement and each
of the Transaction Documents to which the Anchor Investor is a party constitute (or will constitute, when executed and delivered by the
Anchor Investor) the valid and legally binding obligations of the Anchor Investor (assuming the due authorization, execution and delivery
of this Agreement and such Transaction Documents by the Company and the other parties hereto and thereto, as applicable), enforceable
in accordance with their terms and conditions, except as the enforceability thereof may be limited by any applicable bankruptcy, reorganization,
insolvency or other laws affecting creditors’ rights generally or by general principles of equity.
Section
4.5
No Breach
. The execution, delivery and performance of this Agreement or the Transaction Documents by the Anchor Investor,
and the consummation by the Anchor Investor of the transactions contemplated hereby and thereby, do not (a) result in any breach of,
constitute (with or without consent or notice or lapse of time or both) a default under or result in a violation of the provisions of
(i) subject to receipt of the APLD Approvals, the Organization Documents of the Anchor Investor, or (ii) any Anchor Assigned Contract
or any other material Contract to which the Anchor Investor is bound, or (b) violate any material law or any judgment, injunction, decree,
order, ruling, or award rendered by or subject to any Governmental Authority to which the Anchor Investor is subject, except in each
case of clause
(a)(ii)
or
(b)
, where the breach, default, violation, failure to obtain a permit, give notice, make a filing
or obtain consent would not (x) be material to the Anchor Investor, (y) materially and adversely affect its Interests, the Project, or
any Anchor Assigned Contract, or (z) otherwise prevent, materially delay or materially impair the ability of the Anchor Investor to consummate
the transactions contemplated by this Agreement or the Transaction Documents.
Section
4.6
Consents
. The execution, delivery and performance of this Agreement or any of the Transaction Documents by the Anchor
Investor and the consummation by the Anchor Investor of the transactions contemplated hereby and thereby do not require any consent,
approval, authorization, permit, order, filing, registration or qualification of or with any Governmental Authority or any other Person,
except as set forth on
Schedule 4.6
hereto under the respective heading for the Anchor Investor, each of which has been obtained
or made and is in full force and effect, and except where the failure to obtain a permit, order, registration or qualification, give
notice, make a filing or obtain consent, approval or authorization would not prevent, materially delay or materially impair the ability
of the Anchor Investor to consummate the transactions contemplated by this Agreement or the Transaction Documents.
17
Section
4.7
Sanctions and Unlawful Activity Regulation
. None of the Anchor Investor nor any of its beneficial owners, controlling
persons or Affiliates is a Blocked Person, Restricted Person or is the subject or target of any Sanctions. The funds used by the Anchor
Investor to acquire its Interests are not derived from unlawful activity and do not constitute proceeds of any activity that would violate
any applicable Anti-Money Laundering Laws, Sanctions or Anti-Corruption Laws. The Anchor Investor is not acquiring its Interests for
the direct or indirect benefit of any Person in violation of any Anti-Money Laundering Laws, Sanctions or Anti-Corruption Laws.
Section
4.8
Brokerage
. None of the Anchor Investor nor any of its Affiliates has retained, engaged or entered into any Contract with
any Person who is or will be entitled to any brokerage commissions, finders’ fees or similar compensation in connection with the
transactions contemplated by this Agreement or any Transaction Document for which the Anchor Investor would be liable.
Section
4.9
No Advice
. The Anchor Investor has been represented by, or has had the opportunity to consult with, its own legal, tax,
accounting, financial and other advisers in connection with this Agreement, the Operating Agreement, its Interests and the transactions
contemplated hereby and thereby. The Anchor Investor acknowledges that none of the Company, the Sail Investor nor any of their Affiliates
or Representatives has provided the Anchor Investor with legal, tax, accounting, financial or investment advice in connection with the
transactions contemplated by this Agreement.
Section
4.10
No Solicitation
. Neither the Anchor Investor nor any of its officers, managers, employees, agents or members acting on
its behalf, has, either directly or indirectly, including through a broker or finder, (a) engaged in any general solicitation or (b)
published any advertisement, in each case, in connection with the offer and sale of its Interests.
Section
4.11
Contracts
. Each Anchor Assigned Contract is (or will be, when executed and delivered by the Anchor Investor, the Anchor
Guarantor, or any of their respective Affiliates) valid and binding on the Anchor Investor, the Anchor Guarantor, or the applicable Affiliate
party thereto, and is (or will be, when executed and delivered by the Anchor Investor or the Anchor Guarantor, or any of their respective
Affiliates) in full force and effect and enforceable in accordance with its terms, except for such failures to be valid, binding and
enforceable or in full force and effect as would not (x) be material to the Anchor Investor, (y) adversely affect its Interests, the
Project, or any Anchor Assigned Contract, or (z) prevent, materially delay or materially impair the ability of the Anchor Investor to
consummate the transactions contemplated by this Agreement or the Transaction Documents, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally and subject, as to enforceability,
to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity). (i) None of the Anchor
Investor, the Anchor Guarantor nor any of their respective Affiliates, or, to the Knowledge of the Anchor Investor, no other party to
any Anchor Assigned Contract, is in breach of, or default under, any Anchor Assigned Contract; (ii) no event has occurred that, with
notice or lapse of time or both, would constitute a breach of or default under any Anchor Assigned Contract by the Anchor Investor, the
Anchor Guarantor, any of their respective Affiliates, or, to the Knowledge of the Anchor Investor, any other party thereto; and (iii)
none of the Anchor Investor, the Anchor Guarantor nor any of their respective Affiliates has received written notice from any other party
to any Anchor Assigned Contract that such other party intends to terminate, not renew or renegotiate the terms of such Anchor Assigned
Contract, except, in each case, for such breaches, defaults, disputes, terminations, non-renewals or renegotiations as would not (x)
be material to the Anchor Investor, (y) adversely affect its Interests, the Project, or any Anchor Assigned Contract, or (z) prevent,
materially delay or materially impair the ability of the Anchor Investor to consummate the transactions contemplated by this Agreement
or the Transaction Documents. True, correct and complete copies of each Anchor Assigned Contract (including all attachments, schedules,
exhibits, amendments, modifications, waivers and supplements thereto) have been made available to the Company following the contributions
thereof to the Company in accordance with the terms of this Agreement.
18
Section
4.12
Tax Classification
. The Anchor Investor is classified as a corporation for U.S. federal income Tax purposes.
ARTICLE
V
REPRESENTATIONS
AND WARRANTIES OF THE SAIL GUARANTOR
The
Sail Guarantor hereby represents and warrants to the Company and the Anchor Investor that the following representations are true, correct
and complete:
Section
5.1
Organization and Power
. The Sail Guarantor is a corporation, duly organized, validly existing and in good standing under
the laws of Nevada.
Section
5.2
Power and Authority
. The Sail Guarantor has the power and authority to execute and deliver this Agreement and each of
the Transaction Documents to which it is a party, to perform its obligations hereunder and thereunder, and to consummate the transactions
contemplated hereby and thereby. Subject to the receipt of the Soluna Approvals, the execution and delivery of this Agreement and each
of the Transaction Documents by the Sail Guarantor and the consummation by the Sail Guarantor of the transactions contemplated hereby
and thereby have been, or, in the case of the Transaction Documents, will be as of the Closing, duly authorized by all necessary action
on its part under its Organization Documents, and no other proceedings on the part of the Sail Guarantor are necessary to authorize this
Agreement, the Transaction Documents or to consummate the transactions contemplated hereby.
Section
5.3
Binding Obligations
. This Agreement has been, and each of the Transaction Documents to which the Sail Guarantor is a party
shall be (when executed and delivered by the Sail Guarantor), duly and validly executed and delivered by the Sail Guarantor. This Agreement
and each of the Transaction Documents to which the Sail Guarantor is a party constitute (or will constitute, when executed and delivered
by the Sail Guarantor) the valid and legally binding obligation of the Sail Guarantor (assuming the due authorization, execution and
delivery of this Agreement and such Transaction Documents by the other parties hereto and thereto, as applicable), enforceable in accordance
with their terms and conditions, except as the enforceability thereof may be limited by any applicable bankruptcy, reorganization, insolvency
or other laws affecting creditors’ rights generally or by general principles of equity.
Section
5.4
No Breach
. The execution, delivery and performance of this Agreement or the Transaction Documents by the Sail Guarantor,
and the consummation by the Sail Guarantor of the transactions contemplated hereby and thereby, do not (a) result in any breach of, constitute
(with or without consent or notice or lapse of time or both) a default under or result in a violation of the provisions of (i) subject
to the receipt of the Soluna Approvals, the Organization Documents of the Sail Guarantor, or (ii) any material Contract to which the
Sail Guarantor is bound, (b) violate any law or any judgment, injunction, decree, order, ruling, or award rendered by or subject to any
Governmental Authority to which the Sail Guarantor is subject, or (c) require the Sail Guarantor to obtain any permit or provide any
notice to or make any filing with any Governmental Authority under the provisions of any Applicable Law to which the Sail Guarantor is
subject, except in each case of clause
(a)(ii)
,
(b)
or
(c)
, where the breach, default, violation, failure to obtain
a permit, give notice, make a filing or obtain consent would not (x) be material to the Sail Guarantor, (y) adversely affect its Interests,
the Land, the Project, or any Sail Assigned Contract, or (z) otherwise prevent, delay or impair the ability of the Sail Guarantor to
consummate the transactions contemplated by this Agreement or the Transaction Documents.
19
Section
5.5
Sanctions and Unlawful Activity Regulation
. Neither the Sail Guarantor nor any of its controlling persons or Affiliates
is a Blocked Person, Restricted Person or is the subject or target of any Sanctions. The Sail Guarantor is not a party to this Agreement
for the direct or indirect benefit of any Person in violation of any Anti-Money Laundering Laws, Sanctions or Anti-Corruption Laws. Any
funds used by the Sail Guarantor to perform its obligations hereunder are not derived from unlawful activity and do not constitute proceeds
of any activity that would violate any applicable Anti-Money Laundering Laws, Sanctions or Anti-Corruption Laws.
Section
5.6
No Advice
. The Sail Guarantor has been represented by, or has had the opportunity to consult with, its own legal, tax,
accounting, financial and other advisers in connection with this Agreement and the transactions contemplated hereby. The Sail Guarantor
acknowledges that none of the Company, the Anchor Investor nor any of their respective Affiliates or Representatives has provided the
Sail Guarantor with legal, tax, accounting, financial or investment advice in connection with the transactions contemplated by this Agreement.
ARTICLE
VI
REPRESENTATIONS
AND WARRANTIES OF THE ANCHOR GUARANTOR
The
Anchor Guarantor hereby represents and warrants to the Company and the Sail Investor that the following representations are true, correct
and complete:
Section
6.1
Organization and Power
. The Anchor Guarantor is a limited liability company, duly organized, validly existing and in good
standing under the laws of Delaware. The Anchor Guarantor is a direct, wholly owned subsidiary of Applied Digital Corporation, a Nevada
corporation (the “
Anchor TopCo
”). The Anchor TopCo is the sole owner of all of the issued and outstanding membership
interests of the Anchor Guarantor, and conducts all of its business and operations through the Anchor Guarantor and its Subsidiaries.
Section
6.2
Power and Authority
. The Anchor Guarantor has the power and authority to execute and deliver this Agreement and each of
the Transaction Documents to which it is a party, to perform its obligations hereunder and thereunder, and to consummate the transactions
contemplated hereby and thereby. Subject to the receipt of the APLD Approvals, the execution and delivery of this Agreement and each
of the Transaction Documents by the Anchor Guarantor and the consummation by the Anchor Guarantor of the transactions contemplated hereby
and thereby have been, or, in the case of the Transaction Documents, will be as of the Closing, duly authorized by all necessary action
on its part under its Organization Documents, and no other proceedings on the part of the Anchor Guarantor are necessary to authorize
this Agreement, the Transaction Documents or to consummate the transactions contemplated hereby.
Section
6.3
Binding Obligations
. This Agreement has been, and each of the Transaction Documents to which the Anchor Guarantor is a
party shall be (when executed and delivered by the Anchor Guarantor), duly and validly executed and delivered by the Anchor Guarantor.
This Agreement and each of the Transaction Documents to which the Anchor Guarantor is a party constitute (or will constitute, when executed
and delivered by the Anchor Guarantor) the valid and legally binding obligation of the Anchor Guarantor (assuming the due authorization,
execution and delivery of this Agreement and such Transaction Documents by the other parties hereto and thereto, as applicable), enforceable
in accordance with their terms and conditions, except as the enforceability thereof may be limited by any applicable bankruptcy, reorganization,
insolvency or other laws affecting creditors’ rights generally or by general principles of equity.
20
Section
6.4
No Breach
. The execution, delivery and performance of this Agreement or the Transaction Documents by the Anchor Guarantor,
and the consummation by the Anchor Guarantor of the transactions contemplated hereby and thereby, do not (a) result in any breach of,
constitute (with or without consent or notice or lapse of time or both) a default under or result in a violation of the provisions of
(i) subject to receipt of the APLD Approvals, the Organization Documents of the Anchor Guarantor, or (ii) any material Contract to which
the Anchor Guarantor is bound, (b) violate any law or any judgment, injunction, decree, order, ruling, or award rendered by or subject
to any Governmental Authority to which the Anchor Guarantor is subject, or (c) require the Anchor Guarantor to obtain any permit or provide
any notice to or make any filing with any Governmental Authority under the provisions of any Applicable Law to which the Anchor Guarantor
is subject, except in each case of clause
(a)(ii)
,
(b)
or
(c)
, where the breach, default, violation, failure to
obtain a permit, give notice, make a filing or obtain consent would not (x) be material to the Anchor Guarantor, (y) adversely affect
its Interests, the Land, the Project, or any Anchor Assigned Contract, or (z) otherwise prevent, delay or impair the ability of the Anchor
Guarantor to consummate the transactions contemplated by this Agreement or the Transaction Documents.
Section
6.5
Sanctions and Unlawful Activity Regulation
. Neither the Anchor Guarantor nor any of its controlling persons or Affiliates
is a Blocked Person, Restricted Person or is the subject or target of any Sanctions. The Anchor Guarantor is not a party to this Agreement
for the direct or indirect benefit of any Person in violation of any Anti-Money Laundering Laws, Sanctions or Anti-Corruption Laws. Any
funds used by the Anchor Guarantor to perform its obligations hereunder are not derived from unlawful activity and do not constitute
proceeds of any activity that would violate any applicable Anti-Money Laundering Laws, Sanctions or Anti-Corruption Laws.
Section
6.6
No Advice
. The Anchor Guarantor has been represented by, or has had the opportunity to consult with, its own legal, tax,
accounting, financial and other advisers in connection with this Agreement and the transactions contemplated hereby. The Anchor Guarantor
acknowledges that none of the Company, the Sail Investor nor any of their respective Affiliates or Representatives has provided the Anchor
Guarantor with legal, tax, accounting, financial or investment advice in connection with the transactions contemplated by this Agreement.
ARTICLE
VII
LIABILITY
Section
7.1
Survival
. Unless otherwise set forth in this Agreement, the representations and warranties of the Parties contained in
or made pursuant to this Agreement shall survive the Closing (
provided
, that the representations and warranties of the Parties
contained in this Agreement that are not Fundamental Representations shall terminate and be of no further force and effect on the date
that is eighteen (18) months after the Closing Date), and shall in no way be affected by any investigation or knowledge of the subject
matter thereof made by or on behalf of the Parties.
Section
7.2
No Special Damages
. No Party (nor any Affiliate of such Party) shall be liable under this Agreement to any other Party
or any of its Affiliates for any indirect, incidental, consequential, special, treble, or punitive damages, nor for any loss of profit,
loss of use, loss of business, or business interruption damages of any kind.
Section
7.3
Deductible
.
Notwithstanding
anything to the contrary in this Agreement, no claim may be made by any Party under this Agreement for any breach of representation and
warranty (other than a Fundamental Representation or with respect to a claim based on actual fraud) unless and until the aggregate amount
of all liability for such claim exceeds an amount equal to One Hundred Eighty-Seven Thousand Five Hundred Dollars ($187,500) (the “
Deductible
”),
in which event such Party shall only be entitled to recover losses in excess of the Deductible.
21
Section
7.4
Aggregate Liability of the Parties
.
Notwithstanding
anything to the contrary in this Agreement, the aggregate liability under this Agreement for damages arising from any breach of a representation,
warranty or covenant (other than with respect to a claim based on actual fraud) of (a) each of the Sail Parties and their respective
Affiliates, on the one hand, shall be limited to an aggregate amount equal to the sum of the Sail Investor’s Subscription Amount
and the in kind contribution value attributed to the Sail Investor on
Exhibit A
, and (b) each of the Anchor Parties and their
respective Affiliates, on the other hand, shall be limited to an aggregate amount equal to the Anchor Investor’s Subscription Amount
except with respect to a breach by any Anchor Party or their respective Affiliates of
Section 8.4
. For the avoidance of doubt,
the limitations in this
Section 7.4
shall not apply to, limit or reduce any Party’s obligation to fund its Subscription
Amount or to make or deliver any contribution required to be made at the Closing pursuant to
Section 1.3
, which obligations shall
remain subject to specific performance in accordance with
Section 12.16
.
Section
7.5
Exclusive Remedy
.
Following
the Closing, each Party’s sole and exclusive remedy for any claims of breach of representation or warranty in this Agreement, other
than with respect to any such claims arising out of or relating to actual fraud, shall be a claim for damages as limited by this
ARTICLE
VII
.
ARTICLE
VIII
PRE-CLOSING
COVENANTS
Section
8.1
No Action
.
(a)
During the period from the date of this Agreement through the earlier of (i) the Closing or (ii) the date of termination of this Agreement
pursuant to
Section 10.1
(the “
Interim Period
”), the Company shall not, and the Anchor Investor shall cause
JV Entity Propco to not, engage in any activities of any nature without the Sail Investor’s prior written consent, except for (A)
ordinary course corporate and administrative activities (including the maintenance of its legal existence, books and records, and compliance
with applicable law and its organizational documents) or (B) activities provided in, contemplated by or required under this Agreement.
(b)
During the Interim Period, none of the Company, the Sail Investor, the Ground Lessee, the Sail Guarantor, the Anchor Investor or the
Anchor Guarantor shall take any actions with respect to the Project that are set forth on
Exhibit D
.
(c)
During the Interim Period, the Anchor Investor shall not, and shall cause its Affiliates not to, make any material change to the design,
engineering, development or construction of the Project without the prior written consent of the Sail Investor (such consent not to be
unreasonably withheld, conditioned or delayed, and which consent shall be deemed provided if the Sail Investor failed to object within
forty-eight (48) hours after receipt of the applicable consent request), including with respect to any change that could adversely affect
Electric Reliability Council of Texas compliance or the ability of the Company or the Sail Investor or its Affiliates to comply with
their respective obligations related to power supply to the Project (directly or indirectly).
22
Section
8.2
Transaction Documents
. During the Interim Period, the Parties shall use commercially reasonable efforts to negotiate in
good faith to finalize, in a form reasonably acceptable to the Sail Investor and the Anchor Investor, any Transaction Documents not attached
hereto as an Exhibit in substantially final form, but in any event, where applicable, in accordance with the forms of agreements or term
sheets attached hereto as Exhibits.
Section
8.3
Efforts
.
(a)
During the Interim Period, each of the Parties shall, and shall cause their respective Related Parties to, use commercially reasonable
efforts to take all actions, and do, or cause to be done, all things necessary, proper, or advisable under any Applicable Laws to consummate
the Closing and the transactions contemplated hereby. Prior to the Closing, the Anchor Investor shall keep the Sail Investor reasonably
informed as to the status of the Project Financing and provide the Sail Investor with the consultation rights set forth in
Section
8.3(b)
. Notwithstanding anything to the contrary in this Agreement, (i) the “commercially reasonable efforts” standard
set forth in this
Section 8.3
shall not in any event be construed to require any Party or any of its Affiliates or its or their
direct or indirect equityholders to take or commit to take any action that limits in any respect such Party’s freedom of action
with respect to, or its ability to retain, any business, products, rights, services, licenses, assets or properties of such Party or
any of its equityholders or its or their respective Affiliates and (ii) in no event shall any Party or any of its Affiliates be required
by a Governmental Authority to agree to take, or enter into any action, which action is not conditioned upon the Closing.
(b)
During the Interim Period, the Anchor Investor shall be responsible for arranging the Project Financing (as defined herein), and shall
have authority to determine the terms and conditions thereof;
provided
,
however
, that the Anchor Investor shall use commercially
reasonable efforts to (i) consult with the Sail Investor regarding the material terms of any proposed Project Financing and consider
the Sail Investor’s feedback thereto (including any proposed comments to the definitive documentation for the Project Financing
and any other related documentation), (ii) promptly share each material “turn” of the draft definitive documentation for
the Project Financing with the Sail Investor and (iii) hold regular meetings of a designee of the Anchor Investor (which may be the Chief
Financial Officer of the Anchor Investor or any other officer or employee of the Anchor Investor or its Affiliates designated by the
Chief Executive Officer or Chief Financial Officer of the Anchor Investor), and designees of the Sail Investor, at such intervals as
are mutually agreed by the Anchor Investor and the Sail Investor, to discuss the status, progress and relevant details regarding the
Project Financing. Notwithstanding anything to the contrary in this Agreement, (x) the failure of the Anchor Investor to comply with
the foregoing consultation provisions shall not affect the validity or enforceability of any Project Financing and (y) neither the Sail
Investor nor any of its Affiliates shall be required to enter into, execute, deliver, or become a party to any definitive documentation
for the Project Financing or any guaranty or other credit support arrangement in connection with any Project Financing. For the avoidance
of doubt, under no circumstances, including the failure of the Anchor Investor to arrange or obtain the Project Financing, shall the
Anchor Investor or any of its Affiliates be responsible in any way for providing, investing in, making capital contributions for, or
otherwise funding, any of the Project Financing. For purposes of this
Section 8.3(b)
, “
Project Financing
” shall
mean any debt financing for the Company or any of its Subsidiaries with respect to the development, construction or operation of the
Project, including any construction loan, term loan or other credit facility, any financing for long-lead equipment, and any refinancing,
replacement, extension or amendment of any of the foregoing, in each case that is non-recourse to any direct or indirect owner of the
Company or its applicable Subsidiaries (other than with respect to customary pledges of equity interests in the borrower of such debt
financing, and any completion guaranty to be provided by Anchor TopCo).
23
Section
8.4
Right to Access the Land and Develop the Project
. During the Interim Period, the Fee Owner shall permit the Anchor Guarantor
and its Subsidiaries (including the Anchor Investor, the Company and JV Entity Propco) and the Anchor Representatives to enter upon the
Land to design, engineer, permit and prepare the site for construction of the Project (collectively, the “
Activities
”)
which include: (A) non-invasive site work, consisting solely of design, engineering, permitting, surveys, geotechnical investigations,
and staking, in each case in connection with the Project; and (B) concrete foundation and slab work for the Project, but only to the
extent such work is within the scope of a written authorization issued by the Fee Owner (an “
Authorization
”), provided
that Anchor Guarantor shall provide Fee Owner and Fee Owner’s general manager with reasonable prior written notice (e-mail being
sufficient for this purpose) before commencing each major milestone of development of the Project. In each case, the Activities are subject
to the following limitations:
(a)
The Anchor Guarantor shall obtain, or cause to be obtained, insurance coverages in such amounts, with such deductibles and covering such
risks as are customarily maintained by prudent developers of projects of a similar size, type and geography as the Project, and otherwise
in form and substance reasonably satisfactory to the Sail Investor (the “
Required Insurance
”), which obligation may
be satisfied, in whole or in part, through insurance maintained by the Anchor Guarantor, any of its Affiliates or any of its or their
contractors (including Hypergate and its insurance programs). (i) No later than three (3) Business Days following the date of this Agreement,
the Anchor Investor shall deliver, or cause to be delivered, to the Sail Investor a schedule setting forth the Required Insurance for
approval by the Sail Investor (the “
Insurance Schedule
”); and (ii) no later than ten (10) Business Days following
the date of this Agreement, the Anchor Guarantor shall obtain, or cause to be obtained, the certificates of insurance for the applicable
Required Insurance and shall cause the Sail Investor (or its applicable Affiliates) to be added to the applicable Required Insurance
as additional insured (clauses (i) and (ii), collectively, the “
Insurance Requirements
”). Notwithstanding anything
to the contrary herein, in the event that the Anchor Guarantor fails to comply with any portion of the Insurance Requirements (including
the failure to meet a deadline therein or deliver a schedule setting forth the Required Insurance in form and substance reasonably satisfactory
to the Sail Investor), the Sail Investor shall have a right, as its sole and exclusive remedy (exercisable within the earlier of (x)
three (3) Business Days after receipt of the Insurance Schedule, and (y) thirteen (13) Business Days after the date of this Agreement),
with respect to such failure to comply with the Insurance Requirements, to terminate this Agreement pursuant to
Section 10.1(d)
(after giving effect to the applicable notice and cure periods therein).
(b)
Subject to
Section 8.6
, all Activities shall be at the Anchor Guarantor’s (or the Anchor Investor’s) sole expense
and shall be conducted in accordance with applicable laws and regulations, including, without limitation, laws relating to worker safety,
environmental protection, construction, and the proper disposal of discarded materials. The Anchor Guarantor and the Anchor Investor
shall be exclusively responsible for paying all inspection fees, appraisal fees, engineering fees, construction fees, and other expenses
of any kind or nature whatsoever incurred by any Anchor Representatives relating to the Activities. All such amounts that are actually
paid by the Anchor Guarantor or its Affiliates at any time prior to the Closing or the date of termination of this Agreement pursuant
to
Section 10.1
, as applicable, and whether or not incurred prior to the date of this Agreement, are referred to herein as “
Funded
Costs
”.
(c)
The Anchor Guarantor shall, or shall cause the Anchor Investor to, promptly repair, at the Anchor Guarantor’s sole cost and expense,
any physical damage to (i) any portion of the Land outside the scope of the approved plans for the Project, or (ii) any adjacent property,
utilities or infrastructure, in each case to the extent caused by the Anchor Guarantor or Anchor Representatives in connection with the
Activities, and shall restore the affected area to a condition substantially similar to, or no less favorable than, its condition prior
to such damage.
24
(d)
The Anchor Guarantor shall not permit any mechanic’s or materialmen’s liens or any other liens to attach to the Land by reason
of the performance of, or in connection with, any Activities conducted by or on behalf of the Anchor Guarantor or any Anchor Representative.
If any such liens attach to the Land, the Anchor Guarantor shall, within twenty (20) days after receiving written notice or actual knowledge
thereof, whichever is first, from the Fee Owner, either (i) cause such lien to be released and discharged of record by payment or otherwise,
or (ii) cause such lien to be bonded over or otherwise removed as an encumbrance against the Land by the filing of a bond to indemnify
against the lien or other security permitted under Applicable Law, or provide the Fee Owner with other reasonable security, in each case
in an amount and form sufficient to prevent any foreclosure of such lien against the Land. So long as the Anchor Guarantor has timely
obtained and maintains such bond or other security, the Anchor Guarantor may contest the validity or amount of such lien in good faith
by appropriate proceedings, shall not be required to obtain a release of the underlying claim during the pendency of such contest, and
shall not be in default hereunder by reason of such lien. Nothing herein shall limit Anchor Guarantor’s rights under Chapter 53
of the Texas Property Code to remove, discharge or indemnify against any such lien by any means permitted thereunder. If the Anchor Guarantor
fails to timely take either of the actions described in clause
(i)
or
(ii)
above, the Fee Owner shall have the right, but
not the obligation, to expend such sums as are necessary to satisfy and remove of record such lien, and the Anchor Guarantor shall reimburse
the Fee Owner for all reasonable out-of-pocket costs, expenses and other amounts incurred by the Fee Owner in satisfying and removing
of record any such lien promptly upon written demand accompanied by reasonable supporting documentation. The provisions of this paragraph
shall survive the termination of this Agreement.
(e)
Neither the Anchor Guarantor nor any Anchor Representative shall, without the prior written consent of the Fee Owner (which consent may
be withheld in the Fee Owner’s sole and absolute discretion), undertake any activity on the Land that requires a permit, license
or other authorization under Applicable Law unless the Anchor Guarantor or the applicable Anchor Representative has obtained such permit,
license or other authorization and the same is in full force and effect (any such activities, collectively, the “
Restricted
Activities
”).
Section
8.5
Indemnity
. Anchor Guarantor hereby agrees to indemnify, defend and hold harmless Fee Owner from and against any and all
actual out-of-pocket losses, costs, damages, claims, liabilities, expenses, demands or obligations of any kind or nature whatsoever,
to the extent actually incurred by Fee Owner (including reasonable attorneys’ fees, court costs, expenses and disbursements) (collectively,
“
Claims
”) arising out of or relating to any liens filed against the Land and the cost of contesting and removing the
same, or any repair or restoration of the Land required as a result of the Activities to the extent directly resulting from the performance
of the Activities by Anchor Guarantor or any Anchor Representative during the Interim Period;
provided
,
however
, that Anchor
Guarantor shall not be obligated to indemnify, defend or hold harmless Fee Owner for any Claims to the extent arising out of or resulting
from (a) the negligence or willful misconduct of Fee Owner, Ground Lessee or any of their respective Affiliates or Representatives, (b)
any breach by Fee Owner of its obligations under this Agreement, or (c) any acts or omissions occurring after the expiration of the Interim
Period.
Section
8.6
Funded Costs
. Notwithstanding anything to the contrary in this Agreement, if the Closing occurs, the Anchor Investor shall
receive at the Closing a dollar-for-dollar credit against its required Subscription Amount set forth on
Exhibit A
in an amount
equal to the aggregate Funded Costs, including all amounts paid (i) to Hypergate or any of its contractors, subcontractors or suppliers
of any tier for development work actually performed at the Land within the scope of a written site work authorization issued by the Fee
Owner or its Affiliates or (ii) pursuant to a Master Services Agreement (the “
FlexGen Master Services Agreement
”)
and the related purchase orders with FlexGen Power Systems, LLC or any affiliates thereof to be entered into prior to the Closing in
respect of certain medium-voltage equipment in accordance with order specifications approved by the Sail Investor;
provided
, that,
the Investors shall have no obligation to enter into, incur costs related to, or otherwise pay for, the FlexGen Master Services Agreement
prior to Closing;
provided
,
further
, that (a) if the Funded Costs to be credited hereunder exceed the Anchor Investor’s
Subscription Amount set forth on
Exhibit A
, the Anchor Investor will receive a dollar for dollar credit against future required
contribution amounts in accordance with the provisions of the Operating Agreement, and (b) if this Agreement is validly terminated pursuant
to
Section 10.1
in accordance with
Section 10.2(a)
, following such termination, the Anchor Investor shall deliver to the
Sail Investor a Funded Costs Statement, and the Sail Investor shall reimburse, or cause to be reimbursed, in cash, the Anchor Investor
for eighty percent (80%) of the Funded Costs set forth therein, as reasonably documented by the Anchor Investor, with such reimbursement
amount not exceeding Forty-Five Million Dollars ($45,000,000) (the “
Funded Costs Reimbursement Amount
”) and the Anchor
Investor shall forfeit the balance of the Funded Costs and shall have no right to reimbursement, restitution, refund or credit of such
balance of the Funded Costs from the Company, the Sail Investor, the Fee Owner, the Ground Lessee, the Sail Guarantor or any of their
respective Affiliates. The Sail Investor shall reimburse, or cause to be reimbursed, the Anchor Investor in cash, (x) forty-nine percent
(49%) of the Funded Costs Reimbursement Amount within ten (10) Business Days of such termination, and (y) the remaining thirty-one percent
(31%) of the Funded Costs Reimbursement Amount within one hundred twenty (120) days of such termination, in each case of clauses (x)
and (y), together with interest at the rate of SOFR plus seven percent (7.00%) per annum, accruing from the date such Funded Cost was
incurred.
25
Section
8.7
Title, Survey and Zoning Due Diligence
.
(a)
Access and Due Diligence
. During the Interim Period, the Sail Parties shall, and shall cause the Fee Owner and their other respective
Affiliates to, afford the Anchor Investor, the Anchor Guarantor and the Anchor Representatives (i) reasonable access to the Land, upon
reasonable prior notice (email being sufficient), for the purpose of conducting such title, survey, environmental, geotechnical, zoning
and other inspections, studies, tests and investigations as the Anchor Investor determines to be necessary or appropriate in connection
with the Project (collectively, the “
Diligence Investigations
”), and (ii) access to all title commitments, title policies,
surveys, zoning reports, permits, environmental and geotechnical reports, and other documents and information in the possession or control
of any Sail Party, the Fee Owner or any of their respective Affiliates relating to the Land, the Fee Ground Lease or the Ground Sublease.
The Diligence Investigations shall be conducted in accordance with
Section 8.4(b)
through
Section 8.4(d)
, mutatis mutandis,
and shall not constitute Restricted Activities for purposes of
Section 8.4(e)
; provided that no invasive environmental testing
shall be conducted without the prior written consent of the Fee Owner (such consent not to be unreasonably withheld, conditioned or delayed).
(b)
Leasehold Title Policy
. The Anchor Investor shall have the right to cause JV Entity Propco to obtain, effective as of the Closing,
from a nationally recognized title insurance company selected by the Anchor Investor (the “
Title Company
”), a leasehold
owner’s policy of title insurance insuring JV Entity Propco’s subleasehold estate in the Land under the Ground Sublease (and
the Ground Lessee’s leasehold estate under the Fee Ground Lease, to the extent required to support such coverage), in such amount
and with such endorsements as may be available in the state of Texas (including, to the extent available, a non-imputation endorsement)
and affirmative coverages as the Anchor Investor may reasonably require (the “
Leasehold Title Policy
”). If any title
commitment or survey received by the Anchor Investor after the date hereof discloses any title exception which was not a Permitted Exception
and such title exception was not caused by or on behalf of the Anchor Investor, the Anchor Investor may deliver to the Sail Investor,
within five (5) Business Days of the Anchor Investor’s receipt of the title commitment and applicable survey, written notice of
any objection to any matter disclosed by any title commitment, survey or update thereof for the Land (each, a “
Title Objection
”),
and the Sail Parties shall, and shall cause the Fee Owner and their other respective Affiliates to, use commercially reasonable efforts
to cure or remove each Title Objection to the reasonable satisfaction of the Anchor Investor and the Title Company at or prior to the
Closing; provided that, notwithstanding the foregoing, the Sail Parties shall, and shall cause the Fee Owner to, cause to be released
and discharged of record at or prior to the Closing any Lien (other than Permitted Liens) securing the payment of money that was created,
assumed or suffered by any Sail Party, the Fee Owner or any of their respective Affiliates. Should the Anchor Investor fail to timely
deliver to Fee Owner a Title Objection, the Anchor Investor shall be deemed to have approved such matters and such matters shall be deemed
to be Permitted Exceptions. If the Anchor Investor timely provides a Title Objection to Sail Investor, Sail Investor may elect, by providing
written notice (the “
New Title and Survey Election Notice
”) to the Anchor Investor on or prior to 6:00 p.m. (Eastern
Time) on the day that is five (5) Business Days after Sail Investor’s receipt of such Title Objection to the Anchor Investor of
whether or not it intends to cure or cause the cure of the title commitment and survey matters subject to the Title Objection. If Sail
Investor elects in the New Title and Survey Election Notice to remove or cure any matter subject to a Title Objection, Sail Investor
shall have the right to adjourn the Closing one or more times for a period not to exceed thirty (30) days in the aggregate for the purpose
of effecting such removal or cure (and the date then scheduled for the Closing shall be extended accordingly). If Sail Investor does
not provide a New Title and Survey Election Notice to the Anchor Investor within such five (5) Business Day period, then Sail Investor
shall be deemed to have elected not to remove or cure such matters subject to the Title Objection. If Sail Investor elects or is deemed
to have elected not to remove or cure such matters subject to the Title Objection, then the Anchor Investor shall have the right, as
its sole and exclusive remedy with respect to such election (or deemed election) of Sail Investor, to terminate this Agreement pursuant
to
Section 10.1(e)
.
26
(c)
Cooperation; Non-Imputation Affidavit
. During the Interim Period, the Sail Parties shall, and shall cause the Fee Owner and their
other respective Affiliates to, cooperate in good faith with the Anchor Investor, the Anchor Guarantor, JV Entity Propco and the Anchor
Representatives in connection with the Diligence Investigations, the issuance of the Leasehold Title Policy and the Zoning Diligence,
including by (i) executing and delivering to the Title Company at or prior to the Closing (A) a customary non-imputation affidavit, in
form and substance reasonably acceptable to the Title Company, as may be required by the Title Company as a condition to issuing a non-imputation
endorsement to the Leasehold Title Policy (the “
Non-Imputation Affidavit
”) (provided, however, that the Non-Imputation
Affidavit shall not cover any matters caused by the Anchor Investor or its contractors (including Hypergate and its subcontractors),
and (B) such owner’s affidavits, gap indemnities, evidence of authority, estoppel certificates and recordable memoranda of the
Fee Ground Lease and the Ground Sublease as the Title Company may reasonably require to issue the Leasehold Title Policy (together with
the Non-Imputation Affidavit, the “
Title Deliverables
”); and (ii) in connection with the Anchor Investor’s review
of the zoning, land use, subdivision, platting, permitting and entitlement status of the Land and the Project (the “
Zoning Diligence
”),
(A) executing and delivering such applications, owner authorizations, consents and letters of authorization as the Anchor Investor may
reasonably request, and (B) requesting from the applicable Governmental Authority such zoning verification letters, to the extent available
in the applicable jurisdiction, and other written confirmations as the Anchor Investor may reasonably request.
(d)
Costs
. All reasonable and documented out-of-pocket costs of the Diligence Investigations, the Leasehold Title Policy and the Zoning
Diligence incurred by the Anchor Investor or its Affiliates shall constitute Transaction Costs and shall be reimbursed in accordance
with
Section 12.8
. Notwithstanding the foregoing, the costs of curing or removing any Title Objection or any Lien (except for
any Permitted Lien) described in the proviso to
Section 8.7(b)
shall be borne by the Sail Parties.
ARTICLE
IX
CONDITIONS
Section
9.1
Conditions to Obligations of All Parties
. The obligations of the Parties to consummate the Closing are subject to the
satisfaction, at or prior to the Closing, of the following conditions (all or any of which may be waived in whole or in part by mutual
agreement of the Parties in their sole discretion):
(a)
Orders
. No temporary restraining order, preliminary or permanent injunction, or other Order shall be in effect that enjoins, prohibits,
or otherwise prevents, or purports to enjoin, prohibit, or otherwise prevent, the consummation of the transactions contemplated by this
Agreement or the Transaction Documents;
(b)
Laws
. No Law shall have been enacted or shall be deemed applicable to the transactions contemplated by this Agreement or the Transaction
Documents which makes the consummation of such transactions illegal or prevents the Closing from occurring;
27
(c)
Litigation
. No Action by or before any court or other Governmental Authority shall have been instituted or threatened in writing
by any Governmental Authority that would reasonably be expected to prevent or prohibit the consummation of the transactions contemplated
by this Agreement or the Transaction Documents; and
(d)
Tax Abatement
. The Tax Abatement Vote shall have occurred.
Section
9.2
Conditions to Obligations of the Sail Investor, the Sail Guarantor, STX HoldCo and the Ground Lessee
. The obligations
of the Sail Investor, the Sail Guarantor, the Ground Lessee and STX HoldCo to consummate the Closing are subject to the satisfaction,
at or prior to the Closing, of each of the following conditions (all or any of which may be waived in whole or in part by the Sail Investor
in its sole discretion):
(a)
Representations and Warranties
. Each of the representations and warranties made by the Anchor Parties in this Agreement shall
be true and correct in all respects as of the Closing as if made on and as of the Closing except for such inaccuracies as are de minimis
in nature and amount relative to such representation and warranty taken as a whole, except, in each case, to the extent that such representations
and warranties refer specifically to an earlier date, in which case such representations and warranties shall have been true and correct
in all respects as of such earlier date;
(b)
Performance
. Each of the Company, the Anchor Investor and the Anchor Guarantor shall have performed or complied in all material
respects with all obligations and covenants required by this Agreement to be performed or complied with by such Party at or prior to
the Closing;
(c)
Deliveries at Closing
. Each of the Company, the Anchor Investor and the Anchor Guarantor shall have executed and delivered (or
caused to be executed and delivered) to the Sail Investor, the Ground Lessee, STX HoldCo, or the Sail Guarantor, as applicable, all agreements
and other documents required to be executed and delivered by such Party to the Sail Investor, the Ground Lessee, STX HoldCo or the Sail
Guarantor, as applicable, pursuant to
Section 1.3
at or prior to the Closing; and
(d)
Soluna Approvals
. The Sail Guarantor, the Sail Investor, STX HoldCo and the Ground Lessee shall have obtained all internal approvals
(including any board of directors, committee (including the related party transaction committee) or other corporate approvals) required
for the execution, delivery and performance of the Transaction Documents (the “
Soluna Approvals
”).
Section
9.3
Conditions to Obligations of the Anchor Investor and the Anchor Guarantor
. The obligations of the Anchor Investor and
the Anchor Guarantor to consummate the Closing are subject to the satisfaction, at or prior to the Closing, of each of the following
conditions (all or any of which may be waived in whole or in part by the Anchor Investor in its sole discretion):
(a)
Representations and Warranties
. Each of the representations and warranties made by the Sail Parties in this Agreement shall be
true and correct in all respects as of the Closing as if made on and as of the Closing except for such inaccuracies as are de minimis
in nature and amount relative to such representation and warranty taken as a whole, except, in each case, to the extent that such representations
and warranties refer specifically to an earlier date, in which case such representations and warranties shall have been true and correct
in all respects as of such earlier date;
28
(b)
Performance
. Each of the Company, the Sail Investor, the Ground Lessee, STX HoldCo and the Sail Guarantor shall have performed
or complied in all material respects with all obligations and covenants required by this Agreement to be performed or complied with by
such Party at or prior to the Closing;
(c)
Deliveries at Closing
. Each of the Company, the Sail Investor, the Ground Lessee, STX HoldCo and the Sail Guarantor shall have
executed and delivered (or caused to be executed and delivered) to the Anchor Investor or the Anchor Guarantor, as applicable, all agreements
and other documents required to be executed and delivered by such Party to the Anchor Investor or the Anchor Guarantor, as applicable,
pursuant to
Section 1.3
at or prior to the Closing;
(d)
ChronoScale Approvals
. ChronoScale Holdings Corporation and the applicable tenant under the ChronoScale Lease shall have obtained
all internal approvals (including any board of directors, committee (including the related party transaction committee) or other corporate
approvals) required for the execution, delivery and performance of the ChronoScale Lease, and such approvals shall remain in full force
and effect as of the Closing Date (the “
ChronoScale Approvals
”);
(e)
APLD Approvals
. The Anchor Guarantor, the Anchor Investor and JV Entity Propco shall have obtained all internal approvals (including
any board of directors, committee (including the related party transaction committee) or other corporate approvals) required for the
execution, delivery and performance of the Transaction Documents (the “
APLD Approvals
”); and
(f)
Leasehold Title Policy
. The Title Company shall have issued, or shall be irrevocably committed to issue upon the Closing (subject
only to payment of the applicable premium), the Leasehold Title Policy, including such endorsements and affirmative coverages as are
described in
Section 8.7(b)
, insuring JV Entity Propco’s subleasehold estate in the Land subject only to Permitted Liens
and such other matters as the Anchor Investor shall have approved in accordance with
Section 8.7(b)
.
ARTICLE
X
TERMINATION
Section
10.1
Termination
. At any time prior to the Closing, this Agreement may be terminated and the transactions contemplated hereby
may be abandoned as follows:
(a)
by mutual written consent of the Parties;
(b)
by the Sail Investor or the Anchor Investor, if the Closing has not occurred on or before December 1, 2026, or such later date as the
Parties may agree in writing (as it may be so extended or automatically extended pursuant to the following proviso, the “
Outside
Date
”);
provided
, that if, on December 1, 2026, all conditions set forth in ARTICLE IX have been satisfied or waived
(other than those conditions that by their nature are to be satisfied at the Closing, each of which is capable of being satisfied at
such time) other than the condition relating to (x) the Tax Abatement Vote, then the Outside Date shall automatically be extended, one
time only, by thirty (30) days, or (y) the issuance of the Leasehold Title Policy or the delivery of the Title Deliverables, then the
Outside Date shall automatically be extended, one time only, by ten (10) days, but in no event shall any extension under this proviso
extend the Outside Date beyond December 31, 2026;
provided
,
further
, that the right to terminate this Agreement under this
Section 10.1(b)
shall not be available to (i) the Sail Investor if the Sail Investor, the Ground Lessee or the Sail Guarantor
has materially breached any of its covenants or other agreements contained in this Agreement and such material breach primarily causes
the failure of the Closing to occur on or before the Outside Date, or (ii) the Anchor Investor if the Anchor Investor or the Anchor Guarantor
has materially breached any of its covenants or other agreements contained in this Agreement and such material breach primarily causes
the failure of the Closing to occur on or before the Outside Date;
29
(c)
by the Sail Investor or the Anchor Investor prior to the Closing if (i) a Governmental Authority of competent jurisdiction shall have
issued an Order, enacted a Law, or instituted any Action, in any such case, having the effect of restraining, enjoining, or otherwise
prohibiting the transactions contemplated by this Agreement or the Transaction Documents, or attempting to restrain, enjoin, or otherwise
prohibit such transactions, and (ii) such Order, Law, or Action shall have become final and non-appealable;
provided
that the
right to terminate this Agreement under this
Section 10.1(c)
shall not be available to any Party whose breach of a representation,
warranty, covenant or agreement under this Agreement has been the primary cause of, or primarily resulted in, the failure of the Closing
to occur on or before such date;
(d)
by the Sail Investor, if the Company, the Anchor Investor or the Anchor Guarantor shall have breached or failed to perform any of the
representations, warranties, covenants, or agreements contained in this Agreement to be complied with by the Company, the Anchor Investor
or the Anchor Guarantor, as applicable, such that any closing conditions set forth in
Section 9.2
could not be satisfied and such
breach or failure to perform (if capable of being cured) shall not have been cured within thirty (30) days following receipt by the Company,
the Anchor Investor or the Anchor Guarantor, as applicable, of notice of such breach or failure from the Sail Investor (but in no event
beyond the Outside Date); or
(e)
by the Anchor Investor, if the Company, the Sail Investor, the Ground Lessee or the Sail Guarantor shall have breached or failed to perform
any of the representations, warranties, covenants, or agreements contained in this Agreement to be complied with by the Company, the
Sail Investor, the Ground Lessee or the Sail Guarantor, as applicable, such that any closing conditions set forth in
Section 9.3
could not be satisfied and such breach or failure to perform (if capable of being cured) shall not have been cured within thirty (30)
days following receipt by the Company, the Sail Investor, the Ground Lessee or the Sail Guarantor, as applicable, of notice of such breach
or failure from the Anchor Investor (but in no event beyond the Outside Date).
Section
10.2
Effect of Termination
.
(a)
If, pursuant to
Section 10.1
, a Party has the right to terminate this Agreement and desires to exercise such termination right,
such Party shall give written notice thereof to the other Parties, which notice shall describe in reasonable detail the circumstances
giving rise to such right of termination and shall be accompanied by any supporting documentation which may be in such Party’s
possession;
provided
, that the right to terminate this Agreement pursuant to
Section 10.1
shall not be available to any
Party during the pendency of any action for specific performance of this Agreement pursuant to
Section 12.16
;
(b)
If this Agreement is validly terminated pursuant to
Section 10.1
in accordance with
Section 10.2(a)
, this Agreement and
any executed Transaction Documents shall forthwith become null and void, except that this
Section 10.2
and
Article XII
(other than
Section 12.1
) will survive and continue to apply following any termination, and there will be no liability on the
part of the Parties in respect of this Agreement, except as provided in
Section 10.2(c)
and
Section 8.6
.
30
(c)
Notwithstanding anything to the contrary in this Agreement, nothing in this
Section 10.2
shall relieve a Party from liability
for any willful breach of, or actual fraud in connection with, this Agreement occurring prior to such termination.
ARTICLE
XI
GUARANTY
Section
11.1
Sail and Anchor Guarantor
. The Sail Guarantor hereby absolutely, irrevocably and unconditionally guarantees to the Company
and the Anchor Investor the full and punctual performance of the Sail Parties’ representations, warranties, covenants, agreements
and obligations under this Agreement, including all payment obligations hereunder (collectively, the “
Sail Guaranteed Obligations
”).
The Anchor Guarantor hereby absolutely, irrevocably and unconditionally guarantees to the Company and the Sail Investor the full and
punctual performance of the Anchor Parties’ representations, warranties, covenants, agreements and obligations under this Agreement,
including all payment obligations hereunder (collectively, the “
Anchor Guaranteed Obligations
”, and together with
the Sail Guaranteed Obligations, the “
Guaranteed Obligations
”).
Section
11.2
Guaranteed Obligations
. Each of the Guaranteed Obligations is a guaranty of performance and payment when due and not
merely of collection, and each of the Guarantors’ liability hereunder is primary and not secondary. Each Guarantor hereby waives
(a) any right to require the Company to (i) proceed against or exhaust any security held from either Investor or any other Person, (ii)
proceed against or enforce any rights against either Investor or any other Person or (iii) pursue any other remedy in the Company’s
power whatsoever; (b) any defense arising by reason of the incapacity, lack of authority or any disability or other defense (other than
performance or defenses to the payment of the Guaranteed Obligations that are available to the applicable Investor under this Agreement,
except (A) defenses arising from the bankruptcy of the applicable Investor, (B) defenses relating to the due authorization, incapacity
or lack of authority, execution and delivery by the applicable Investor of this Agreement and (C) defenses based upon lack of validity
or enforceability of the Guaranteed Obligations) of the applicable Investor or any other guarantor; (c) any right to the benefit of or
to direct the application of any security held by the Company; (d) any defense arising by reason of any claim or defense based upon an
election of remedies by the Company; (e) notice of acceptance of this guaranty or of any other action taken or omitted to be taken in
reliance hereon; (f) demand of performance, protest, presentment and all other notices of every kind and description whatsoever; and
(g) any requirement that the Company exhaust any right, power or remedy or proceed against the Anchor Investor, the Sail Investor, the
Ground Lessee, STX HoldCo or any of their Affiliates under this Agreement or any other agreement or instrument referred to herein or
therein, or against any other Person under any other guaranty of the Guaranteed Obligations. Any payment by either Guarantor pursuant
to this guaranty shall be made without set-off or counterclaim. None of the Guarantors’ obligations hereunder shall be released,
discharged, diminished or impaired by any amendment or modification of any provision of this Agreement or any waiver, release, consent
or other action or inaction under this Agreement, or any addition, substitution or release of any Person primarily or secondarily liable
for any Guaranteed Obligations;
provided
,
however
, that the Guarantors shall have the benefit of any such extension of
time of payment, or any such waiver or alteration with respect to any of the Guaranteed Obligations or any liability incurred directly
or indirectly in respect thereof to the same extent as the Anchor Investor and Sail Investor, as applicable.
Section
11.3
Liability of Each Guarantor
. The liability of each Guarantor under the guaranties provided in this Article XI is limited
to payments expressly required to be made, or that may become due and owing, by the Anchor Investor or Sail Investor, as applicable,
under this Agreement. Notwithstanding anything to the contrary contained herein, (a) any portion of the Sail Guaranteed Obligations satisfied
or performed by the Sail Investor or any other Person on behalf of the Sail Investor or the Sail Guarantor will discharge such portion
of the Sail Guarantor’s obligation in respect of the Sail Guaranteed Obligations and (b) any portion of the Anchor Guaranteed Obligations
satisfied or performed by the Anchor Investor or any other Person on behalf of the Anchor Investor or the Anchor Guarantor will discharge
such portion of the Anchor Guarantor’s obligation in respect of the Anchor Guaranteed Obligations.
31
Section
11.4
Obligations of Guarantors
. The obligations of the Guarantors as set forth in this Agreement shall be solely the obligations
of the Guarantors and shall not be or be deemed to be obligations of any past, present or future equity holder, director or officer of
the Guarantors.
ARTICLE
XII
MISCELLANEOUS
Section
12.1
Further Assurances
. From and after the Closing, each of the Parties shall execute and deliver such documents and other
papers and take such further actions as may be reasonably required or desirable to carry out the provisions hereof and the transactions
contemplated hereby and to implement the intent of the Parties;
provided
,
however
, in no event shall the foregoing require
any Party to register any equity interests (including the Interests) or any other security of the Company under the Securities Act or
any similar or corresponding state or foreign law, rule or regulation.
Section
12.2
Non-Recourse
.
Notwithstanding anything to the contrary in this Agreement, (a) this Agreement may only be enforced against,
and all legal proceedings (whether in contract or in tort, in law or in equity) that may be based upon, arise out of or relate to this
Agreement, or the negotiation, execution or performance of this Agreement (including any representation or warranty made in or in connection
with this Agreement or as an inducement to enter into this Agreement), may be made only against the Persons that are expressly identified
as parties hereto, and then only with respect to the specific obligations set forth herein with respect to such party and (b) no Person
who is not a named party to this Agreement, including any past, present or future manager, officer, employee, incorporator, member, partner,
equityholder, Affiliate, agent, attorney or Representative of any named party to this Agreement (or any Affiliate of any of the aforementioned)
(the “
Non-Party Affiliates
”), shall have any liability (whether in contract or in tort, in law, in equity, granted
by statute or based upon any theory that seeks to impose liability of an entity party against its owners or Affiliates) for any obligations
or liabilities arising under, in connection with or related to this Agreement (as the case may be) or for any claim based on, in respect
of, or by reason of this Agreement (as the case may be) or the negotiation or execution hereof and each Party waives and releases all
such liabilities, claims and obligations against any such Non-Party Affiliates to the maximum extent permitted by law. The Non-Party
Affiliates are expressly intended as third-party beneficiaries of this provision of this Agreement. Without limiting the foregoing, to
the maximum extent permitted by law, each Party disclaims any reliance on any Non-Party Affiliate with respect to the performance of
this Agreement or any representation or warranty made in, in connection with, or as an inducement to this Agreement.
Section
12.3
Construction
. The Parties agree that this Agreement is the product of negotiations between sophisticated Persons, each
of whom was represented by counsel, and each of whom had an opportunity to participate in, and did participate in, the drafting of each
provision hereof. Accordingly, ambiguities in this Agreement, if any, shall not be construed strictly or in favor of or against any Party
but rather shall be given a fair and reasonable construction without regard to the rule of contra proferentem. All pronouns and any variations
thereof refer to the masculine, feminine or neuter, singular or plural, as the context may require. When a reference is made in this
Agreement to a Section, Article, Exhibit or Schedule, such reference shall be to a Section or Article of, or an Exhibit or Schedule to,
this Agreement unless otherwise indicated. For all purposes hereof, the terms “include”, “includes” and “including”
shall be deemed to be followed by the words “without limitation”. Use of the terms “herein,” “hereunder,”
“hereof,” “hereby” and like terms shall be deemed to refer to this entire Agreement and not merely to the particular
provision in which the term is contained, unless the context clearly indicates otherwise. The word “or” is not exclusive.
The word “any” means “any and all”. The phrases “written notice” or “in writing” or words
of similar import shall be deemed satisfied if such notice is delivered by email;
provided
that no delivery failure message is
received by sender. The definitions given for any defined terms in this Agreement shall apply equally to both the singular and plural
forms of the terms defined. All references to “$” or “dollars” refer to United States dollars, and “
U.S.
”
or “
United States
” means the United States of America.
32
Section
12.4
Governing Law; Jurisdiction; Venue
. This Agreement and all matters arising hereunder or with respect hereto, including
tort claims (the “
Covered Matters
”) shall be governed by, and construed in accordance with, the internal laws of the
State of Delaware, without reference to the choice of law principles thereof. Each of the parties hereto irrevocably submits to the exclusive
jurisdiction of the federal and state courts located in the State of Delaware for the purpose of any suit, action, proceeding or judgment
relating to or arising out of the Covered Matters. Service of process in connection with any such suit, action or proceeding may be served
on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Agreement. Each
of the parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying
of venue in such court. Each party hereto irrevocably waives any objection to the laying of venue of any such suit, action, or proceeding
brought in such courts and irrevocably waives any claim that any such suit, action, or proceeding brought in any such court has been
brought in an inconvenient forum.
Section
12.5
Waiver of Jury Trial
. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, EACH PARTY HEREBY WAIVES,
AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT
OF ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING IN WHOLE OR IN PART UNDER, RELATED TO, BASED ON OR IN CONNECTION WITH
THIS AGREEMENT OR THE SUBJECT MATTER HEREOF, WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER SOUNDING IN TORT OR CONTRACT OR OTHERWISE.
ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION 12.5
WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT
OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.
Section
12.6
Headings
. The headings of the articles and sections of this Agreement are inserted for convenience only and shall not
affect the meaning or interpretation of this Agreement or any provisions hereof.
Section
12.7
Notices
. Except as otherwise explicitly set forth herein with respect to notice under certain specified circumstances,
all notices, consents, waivers, requests, or other instruments or communications given pursuant to this Agreement shall be in writing,
shall be signed by the party giving the same, and shall be delivered by hand; sent by registered or certified United States mail, return
receipt requested, postage prepaid; sent by a recognized overnight delivery service; or sent electronically, addressed as follows:
(a)
If to the Company:
STX
JV Holdings LLC
3811
Turtle Creek Boulevard,
Suite
2100, Dallas, Texas
Attention:
Chief Financial Officer
Email:
saidal@applieddigital.com
33
with
a copy (which shall not constitute notice) to:
APLD
Intermediate HoldCo LLC
3811
Turtle Creek Boulevard,
Suite
2100, Dallas, Texas
Attention:
Chief Financial Officer
Email:
saidal@applieddigital.com
and
Soluna
Holdings, Inc.
325
Washington Ave. Ext.
Albany,
New York 12205
Attention:
Michael Picchi, Chief Financial
Officer
Email:
mpicchi@soluna.io (with a
copy to legalnotices@soluna.io, not constituting notice)
and
Lowenstein
Sandler LLP
1251
Avenue of the Americas, 18th Floor
New
York, New York 10020
Attention:
Steven E. Siesser, Esq.;
Brooke A. Gillar, Esq.
Email:
ssiesser@lowenstein.com;
bgillar@lowenstein.com
and
Skadden,
Arps, Slate, Meagher & Flom LLP
One
Manhattan West
New
York, New York 10001
Attention:
Aryan Moniri
Christopher M. Barlow
Email:
aryan.moniri@skadden.com
christopher.barlow@skadden.com
(b)
If to the Sail Investor, the Ground Lessee, STX HoldCo or the Sail Guarantor:
Soluna
Holdings, Inc.
325
Washington Ave. Ext.
Albany,
New York 12205
Attention:
Michael Picchi, Chief Financial
Officer
Email:
mpicchi@soluna.io (with a
copy to legalnotices@soluna.io, not constituting notice)
with
a copy (which shall not constitute notice) to:
Skadden,
Arps, Slate, Meagher & Flom LLP
One
Manhattan West
New
York, New York 10001
Attention:
Aryan Moniri
Christopher M. Barlow
Email:
aryan.moniri@skadden.com
christopher.barlow@skadden.com
34
(c)
If to the Anchor Investor or the Anchor Guarantor:
APLD
Intermediate HoldCo LLC
3811
Turtle Creek Boulevard,
Suite
2100, Dallas, Texas
Attention:
Chief Financial Officer
Email:
saidal@applieddigital.com
with
a copy (which shall not constitute notice) to:
Lowenstein
Sandler LLP
1251
Avenue of the Americas, 18th Floor
New
York, New York 10020
Attention:
Steven E. Siesser, Esq.;
Brooke A. Gillar, Esq.
Email:
ssiesser@lowenstein.com;
bgillar@lowenstein.com
Section
12.8
Expenses
. Following and subject to the Closing, all reasonable and documented out-of-pocket costs and expenses incurred
and actually paid by the Parties in connection with this Agreement, the Transaction Documents and the transactions contemplated hereby
and thereby, including fees and disbursements of counsel, financial advisors and accountants incurred in connection with the negotiation,
documentation and implementation of all arrangements between or among the Parties or their respective Affiliates with respect to this
Agreement and the Transaction Documents, including the preparation, execution or any amendment or waiver hereof and thereof, and the
transactions contemplated hereby (the “
Transaction Costs
”), shall be reimbursed by the Company to the applicable Party
incurring such Transaction Costs. In the event this Agreement is terminated in accordance with
Section 10.1
, no Party shall be
entitled to any reimbursement by the Company or any other Party of any Transaction Costs incurred by such Party.
Section
12.9
Public Announcements
.
(a)
No public announcement or press release in connection with the execution and delivery of this Agreement, the Closing or any other subject
matter of this Agreement by the Parties in connection herewith shall be made or issued by or on behalf of any party without the prior
written approval of the Anchor Investor and the Sail Investor, which approval shall not be unreasonably withheld, conditioned, or delayed,
except (i) as may be required by Applicable Law or obligations under any listing agreement with or rules of any national securities exchange,
(ii) for such press releases or public announcements that use statements that previously have been made publicly, and (iii) as provided
in
Section 12.9(b)
.
(b)
Notwithstanding
Section 12.9(a)
, if a Party or any of its Affiliates is required to make or issue any announcement required by
Applicable Law or the rules of any national securities exchange to which the disclosing party is subject or by any Governmental Authority,
the applicable Party shall give the other Parties reasonable opportunity to comment on such announcement or release before it is made
or issued;
provided
, that opportunity to comment shall not have the effect of preventing the Party making the announcement or
release from complying with its disclosure obligations hereunder.
Section
12.10
Successors and Assigns
. This Agreement shall inure to the benefit of and be binding upon the successors and assigns
of each of the Parties;
provided
,
however
, that no Party shall have the right to assign its rights, duties or obligations
hereunder without the prior written consent of the other Parties.
35
Section
12.11
Confidentiality
. The Parties acknowledge that their Affiliates are parties to the Mutual Non-Disclosure Agreement, dated
as of January 21, 2025 (the “
Confidentiality Agreement
”), which is incorporated herein by reference, and agree to
be bound by and to fulfill and perform the obligations of their applicable Affiliates thereunder,
mutatis mutandis
as if a party
thereto. The Confidentiality Agreement shall continue in full force and effect, including with respect to the Parties hereto, regardless
of any termination of this Agreement, until the earlier of (a) August 1, 2027 and (b) the occurrence of the Closing.
Section
12.12
Entire Agreement
. This Agreement and the Operating Agreement constitute the entire agreement among the Parties and their
respective Affiliates with respect to the subject matters hereof and thereof and supersede any and all other understandings and agreements,
either oral or in writing, between the Parties with respect to the subject matters hereof and thereof. In the event of a conflict between
the provisions of this Agreement and the Operating Agreement, the provisions of the Operating Agreement shall control.
Section
12.13
Amendment and Waiver
. This Agreement (including any Annex, Exhibit or Schedule attached hereto) may be amended or modified
only with the written consent of the Company, the Investors, the Ground Lessee and the Guarantors. Each amendment, modification, or waiver
of this Agreement or any provision hereof made and approved in accordance with this
Section 12.13
shall be binding on each Party.
No waiver of any term or provision hereof shall be effective unless signed in writing by the party waiving such term or provision. No
waiver by a party of any default, misrepresentation or breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation or breach of warranty or covenant hereunder or affect in any way
any rights arising by virtue of any prior or subsequent occurrence. No failure or delay by a party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
Section
12.14
Severability
. Each item and provision of this Agreement is intended to be severable. Except to the extent otherwise
expressly provided in this Agreement, if any term or provision of this Agreement is determined by a court of competent jurisdiction to
be unenforceable for any reason whatsoever, that term or provision shall be modified only to the extent necessary to be enforced, such
term or provision shall be enforced to the maximum extent permitted by Applicable Law, and the validity of the remainder of this Agreement
shall not be adversely affected thereby.
Section
12.15
No Third-Party Beneficiaries
. Except with respect to Non-Party Affiliates under
Section 12.2
, nothing herein
expressed or implied is intended or shall be construed to confer upon or give any Person, other than the parties hereto and their successors
and permitted assigns, any rights or remedies under or by reason of this Agreement.
Section
12.16
Specific Performance
.
The parties hereto agree that irreparable damage would occur in the event that any of the provisions
of this Agreement were not performed in accordance with their specific terms or were otherwise breached, and that money damages or legal
remedies would not be an adequate remedy for any such damages. Therefore, it is accordingly agreed that, in addition to any other remedy
at Applicable Law or in equity, the non-breaching parties shall be entitled to injunctive relief with respect to any such breach, including,
without limitation, specific performance of this Agreement or an order enjoining the breaching party from any threatened, or from the
continuation of any actual, breach of this Agreement by the breaching party to enforce specifically the terms and provisions of this
Agreement, to prevent breaches or threatened breaches of, or to enforce compliance with, the covenants and obligations of the breaching
party, in a court of competent jurisdiction, and appropriate injunctive relief shall be granted in connection therewith without the necessity
of proving the inadequacy of money damages as a remedy and without the necessity of posting bond. Each of the Company, the Investors,
the Ground Lessee and the Guarantors agrees that it will not oppose the granting of an injunction, specific performance or other equitable
relief on the basis that (a) the Company, the Investors, the Ground Lessee or the Guarantors have an adequate remedy at Applicable Law
or (b) an award of specific performance is not an appropriate remedy for any reason at Applicable Law or in equity. Each of the Company,
the Investors, the Ground Lessee and the Guarantors hereby waives (i) any defenses in any action for specific performance, including
the defense that a remedy at law would be adequate, and (ii) any requirement to post a bond or other security as a prerequisite to obtaining
equitable relief.
36
Section
12.17
Counterparts
. This Agreement may be executed in original or by other electronic communication (including PDF or DocuSign)
in several counterparts and, as so executed, shall constitute one agreement, binding on all of the parties hereto, notwithstanding that
all of the parties are not signatory to the original or to the same counterpart.
Section
12.18
Definitions
.
As used herein, the following terms not otherwise defined have the following respective meanings:
(a)
“
Affiliate
” means with respect to a specified entity, any individual or entity that directly, or indirectly through
one or more intermediaries, Controls, is Controlled by or is under common Control with the specified entity, including each executive
officer (within the meaning of Rule 3b-7 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC
promulgated thereunder) of such entity.
(b)
“
Anchor Parties
” means the Anchor Investor and the Anchor Guarantor.
(c)
“
Anchor Representatives
” means the Representatives of the Anchor Guarantor or its Subsidiaries (including the Company
and JV Entity Propco).
(d)
“
Anti-Corruption Law
” means all laws, regulations, directives (including EU directives), conventions, treaties or
guidelines related to public or commercial bribery, corruption, kickbacks, racketeering, fraud, or other improper payments including,
without limitation, the U.S. Foreign Corrupt Practices Act of 1977, as amended, the UK Bribery Act of 2010, and Applicable Law implementing
the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, 1997.
(e)
“
Anti-Money Laundering Laws
” means all laws relating to money laundering or terrorist financing in every jurisdiction
in which the Company or any Company subsidiary is organized or conducts business, including the Currency and Foreign Transactions Reporting
Act of 1970, as amended, the USA PATRIOT ACT of 2001, as amended, and the Anti-Money Laundering Act of 2020.
(f)
“
Applicable Law
” means with respect to any Person, all provisions of laws (common law, statutory or otherwise), statutes,
ordinances, rules, regulations, permits, certificates, judgments, decrees or orders of any Governmental Authority applicable to such
Person, in each case as amended and in effect from time to time, including all applicable requirements of the Public Utility Commission
of Texas, the Electric Reliability Council of Texas and any other Governmental Authority having jurisdiction over the generation, transmission,
distribution, sale or purchase of electric energy in the State of Texas.
(g)
“
Blocked Person
” means any Person that is the target of any Sanctions, including: (i) any Person whose name appears
on any Sanctions-related list of designated Persons maintained by OFAC, the U.S. Department of State, the United Nations Security Council,
the European Union, any EU Member State, or His Majesty’s Treasury of the United Kingdom, (ii) the Government of Venezuela or any
Person located, organized or ordinarily resident in a Sanctioned Jurisdiction, (iii) any Person that is otherwise subject to Sanctions
or engaged in any activity in violation of any Sanctions or (iv) any Person owned or controlled by any such Person or Persons described
in the foregoing clauses (i)-(iii).
37
(h)
“
Business Day
” means a day, other than a Saturday or Sunday, on which commercial banks in New York City are open for
the general transaction of business.
(i)
“
Contract
” means any contract, agreement, license, lease, guaranty, indenture, sales or purchase order, or any other
legally binding commitment in the nature of a contract.
(j)
“
Control
” means the possession, directly or indirectly, of the power to direct or cause the direction of the management
or policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and the terms “
Controlling
”
and “
Controlled
” shall have meanings correlative thereto.
(k)
“
Disclosure Schedule
” means the disclosure schedule delivered by the Sail Investor to the Company concurrently with
the execution and delivery of this Agreement (as may be amended from time to time pursuant to
Section 12.13
).
(l)
“
Environmental Law
” means any law, statute, common-law doctrine, ordinance, rule, regulation, decree or order relating
to (i) pollution, (ii) the protection, preservation or restoration of the environment (including air, surface water, groundwater, drinking
water supply, surface land, subsurface land, plant and animal life or any other natural resource), (iii) any exposure to or Release of,
or the management of (including the use, storage, recycling, treatment, generation, transportation, processing, handling, labeling, production
or disposal of) any Regulated Substance, or (iv) investigation, remediation, cleanup or removal of Regulated Substances in any environmental
media, including the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C.A. §9601, et seq. (“
CERCLA
”);
the Solid Waste Disposal Act (including the Resource Conservation and Recovery Act of 1976, as amended), 42 U.S.C.A. §6901, et seq.
(“
RCRA
”); the Clean Water Act, 33 U.S.C.A. §1251, et seq.; the Clean Air Act, 42 U.S.C.A. §7401, et seq.;
the Toxic Substances Control Act, 15 U.S.C.A. §2601, et seq.; the Occupational Safety and Health Act, 29 U.S.C.A. §651, et
seq. (“
OSHA
”); the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.A. §136, et seq.; the Lead Based
Paint Exposure Reduction Act, 15 U.S.C.A. §2681, et seq.; the Safe Drinking Water Act, 42 U.S.C. §300f, et seq.; and the Hazardous
Materials Transportation Act, 49 U.S.C.
§
5101, et seq.; and all federal, state, county and local laws and ordinances of a
similar nature.
(m)
“
Environmental Permit
” means any permit, approval, authorization, license, registration, certificate, concession,
grant, franchise, variance or permission issued by a Governmental Authority that is required under applicable Environmental Law.
(n)
“
Fundamental Representations
” means (i) with respect to the Sail Investor, the representations and warranties set
forth in
Sections 3.2
,
3.3
and
3.15
and (ii) with respect to the Anchor Investor, the representations and warranties
set forth in
Sections 4.2
and
4.3
.
(o)
“
GAAP
” means generally accepted accounting principles in the United States as in effect from time to time.
38
(p)
“
Governmental Authority
” means any United States or foreign government, any state or other political subdivision thereof,
any entity exercising executive, legislative, judicial, regulatory, administrative or quasi-governmental functions or pertaining to government,
including the Securities
and
Exchange Commission, or any other authority, agency, department, board, bureau, commission or instrumentality
of the United States, any State of the United States or any political subdivision thereof or any foreign jurisdiction, and any court,
tribunal, administrative hearing body, arbitration panel or similar dispute-resolving panel or body and any United States or foreign
governmental or non-governmental self-regulatory organization with authority over the conduct of the business, operations, assets or
personnel of the Person in question (such as FINRA and the IRS).
(q)
“
Knowledge
” means, (i) in respect of the Sail Investor, the Fee Owner or the Ground Lessee, the actual knowledge of
the Chief Financial Officer of the Sail Guarantor, but expressly excluding the knowledge of any other shareholder, partner, member, trustee,
beneficiary, director, officer, manager, employee, agent or representative of the Ground Lessee, the Sail Investor or any of their Affiliates,
or (ii) in respect of the Anchor Investor, the actual knowledge of the Chief Financial Officer and the EVP of Strategic Finance of the
Anchor Guarantor, but expressly excluding the knowledge of any other shareholder, partner, member, trustee, beneficiary, director, officer,
manager, employee, agent or representative of the Anchor Investor or any of its Affiliates. For the purposes of this definition, the
term “actual knowledge” means, with respect to any Person, the conscious awareness of such Person at the time in question
and expressly excluding any constructive or implied knowledge of such Person.
(r)
“
Land
” means the portion of the real property depicted on
Exhibit C
, totaling approximately 100 acres, with
the exact boundaries of the Land to be more specifically set forth in the Ground Sublease.
(s)
“
Lien
” means any mortgage, deed of trust, pledge, hypothecation, assignment, charge, deposit arrangement, encumbrance,
lien (statutory or otherwise), security interest or other security arrangement of any kind or nature whatsoever, including (i) any conditional
sale or other title retention agreement and any financing lease having substantially the same economic effect as any of the foregoing,
(ii) any easement, right of way, restrictive covenant, condition, restriction, declaration or encroachment, (iii) any option to purchase,
right of first refusal, right of first offer or similar right, (iv) any lease, sublease, license or occupancy agreement (other than leases
to tenants in the ordinary course of the Company’s business as disclosed on a schedule hereto), (v) any judgment, order, writ,
attachment or execution, or (vi) any UCC financing statement filing or similar notice filing.
(t)
“
OFAC
” means the Office of Foreign Assets Control of the United States Department of the Treasury.
(u)
“
Operating Agreement
” means the Amended and Restated Limited Liability Company Agreement of the Company to be entered
into by and between the Investors concurrently with the Closing, in form and substance acceptable to the Investors, the current draft
of which was circulated by email from the Sail Investor’s Representatives to the Anchor Investor’s Representatives at 12:52
AM, Eastern Time, on October 16, 2026, as may be modified in a manner acceptable to the Investors.
(v)
“
Organization Documents
” means, (i) with respect to any corporation, the certificate or articles of incorporation
and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (ii) with respect to any
limited liability company, the certificate of formation, constitution or articles of formation or organization and operating agreement
(if relevant); and (iii) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint
venture or other applicable agreement of formation or organization and, if applicable, any agreement, instrument, filing or notice with
respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction
of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.
39
(w)
“
Permitted Exceptions
” means all present and future zoning, building, environmental and other laws, ordinances, codes,
restrictions and regulations of all governmental authorities having jurisdiction with respect to the Land, including, without limitation,
all zoning variances and special exceptions, if any; mechanics’ and materialmen’s liens and any similar liens and encumbrances
for which Anchor Investor or any of its Affiliates is responsible under the Anchor Assigned Contracts; all presently existing and future
liens for unpaid real estate Taxes and water and sewer charges, in all cases, not yet due and payable as of the date of the Closing;
all covenants, restrictions and rights and all easements and agreements for the erection and/or maintenance of water, gas, steam, electric,
telephone, sewer or other utility pipelines, poles, wires, conduits or other like facilities, and appurtenances thereto, over, across
and under the Land which are either (a) presently existing or (b) granted to a public utility in the ordinary course,
provided
that, in all cases, such covenants, restrictions and rights and all easements and agreements shall not prevent the use of the Land for
its current use or its intended use in furtherance of the Project; any title exception arising out of the acts or omissions of Anchor
Investor or its Representatives; and any title exception that is a Permitted Lien.
(x)
“
Permitted Liens
” means (i) Liens for Taxes or other governmental charges and assessments that are not yet delinquent
or are being contested in good faith by appropriate proceedings, in each case for which adequate reserves have been established in accordance
with GAAP, (ii) Liens of carriers, warehousemen, mechanics or materialmen or similar Liens arising in the ordinary course of business
relating to obligations as to which there is no material default on the part of the Investors or which are being contested in good faith
and by appropriate proceedings, (iii) Liens incurred or deposits made in the ordinary course of business in connection with workers’
compensation, unemployment insurance or other types of social security or retirement benefits, (iv) all present and future zoning, building
code, land use, planning, entitlement or other similar laws or restrictions, (v) encroachments, easements, rights-of-way and other similar
encumbrances of record affecting the Land that are not violated and do not interfere with the conduct of business on the Land as presently
conducted or as contemplated to effectuate or support the Project, (vi) the Fee Ground Lease, (vii) the Ground Sublease, (viii) the ChronoScale
Lease, (ix) Liens for which Anchor Investor or any of its Affiliates is responsible under the Anchor Assigned Contracts and (x) Liens
pursuant to or contemplated by, that certain Deed without Warranty, dated as of October 16, 2026, by Soluna DV BNSF Energy HoldCo, LLC
and that certain Real Estate Purchase and Sale Agreement, dated as of September 24, 2026, by and between Soluna DV BNSF Energy HoldCo,
LLC and BNSF Railway Company.
(y)
“
Person
” means an individual, corporation, association, partnership, joint venture, limited liability company, estate,
trust, or any other legal entity.
(z)
“
Project
” means the initial phase of the data center facility known as “
Dorothy 3A
,” consisting
of approximately 75 megawatts of capacity, to be developed on the Land, including all improvements, fixtures, equipment and related infrastructure
constructed or to be constructed thereon.
(aa)
“
Regulated Substance
” means any material, substance, waste, chemical, chemical mixture, chemical, or dangerous good,
which is regulated, listed, defined, or regulated as hazardous, toxic, contaminants, pollutants, or words of similar import under any
Environmental Law(s), or that is otherwise regulated under Environmental Laws due to its toxic, radioactive, ignitable, flammable, explosive,
corrosive, reactive, infectious, carcinogenic, mutagenic, or hazardous properties, including, but not limited to, any petroleum, waste
oil, petroleum derivatives, petroleum constituents, petroleum byproducts, pesticides, radiation, radon, asbestos, polychlorinated biphenyls,
urea formaldehyde foam insulation, 1,4-dioxane, perchlorate, 1,2,3-trichloropropane, and per- and poly-fluoroalkyl substances).
(bb)
“
Release
” means any actual or threatened spilling, emitting, emptying, leaking, dumping, injecting, escaping, pumping,
pouring, disposing, depositing, discharging, dispersing, migrating, or leaching into the environment, including movement through, to,
in, or from air, soil, surface water, groundwater, sediment, or surface or subsurface strata.
40
(cc)
“
Representatives
” means, with respect to any Person, such Person’s Affiliates, and its and their respective
officers, directors, managers, employees, contractors, accountants, consultants, legal counsel, financial advisors and other representatives
and agents.
(dd)
“
Restricted Person
” means any person or entity identified on the U.S. Department of Commerce’s Denied Persons
List, Unverified List or Entity List or the U.S. Department of State’s Debarred Parties List.
(ee)
“
Sail Parties
” means the Sail Investor, the Ground Lessee, STX HoldCo and the Sail Guarantor.
(ff)
“
Sanctions
” mean
s
economic or financial sanctions or trade embargoes imposed, administered, or enforced from
time to time by relevant Governmental Authorities, including OFAC, the U.S. Department of State, the United Nations Security Council,
the European Union, any EU Member State, or His Majesty’s Treasury of the United Kingdom.
(gg)
“
Sanctioned Jurisdiction
” means, at any time, a country or territory that is itself the subject or target of any Sanctions
(at the time of this Agreement, Cuba, Iran, North Korea, Crimea, so-called Donetsk People’s Republic, so-called Luhansk People’s
Republic regions of Ukraine and the non-government controlled areas of the Kherson and Zaporizhzhia oblasts of Ukraine).
(hh)
“
Securities Act
” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
(ii)
“
SOFR
” means a rate per annum equal to the secured overnight financing rate as administered by the Federal Reserve
Bank of New York (or a successor administrator of the secured overnight financing rate).
(jj)
“
Subsidiary
” means, with respect to any Person (the “
parent
”) at any date, (i) any other corporation,
limited liability company, partnership, association or other business entity of which, (A) securities or other ownership interests representing
more than fifty percent (50%) of the voting power thereof or (B) the majority interest in the capital or profits of such corporation,
limited liability company, partnership, association or other business entity, are owned, Controlled or held by the parent and/or one
or more subsidiaries of the parent and (ii) any other Person that is otherwise Controlled by the parent and/or one or more subsidiaries
of the parent.
(kk)
“
Tax Abatement Vote
” means the vote by the applicable Governmental Authority for the designation by the Commissioners
Court of Briscoe County, Texas (the “
County
”) of a reinvestment zone that includes the Land, pursuant to Section 312.401
of the Texas Tax Code, expected to occur on or around November 9, 2026.
(ll)
“
Taxes
” means all U.S. federal, state, local and non-U.S. taxes, including income, gross receipts, license, payroll,
employment, excise, severance, stamp, documentary, occupation, premium, windfall profits, environmental, customs duties, capital stock,
franchise, profits, social security, unemployment, disability, real property, personal property, sales, use, transfer, registration,
value added, alternative or add-on minimum, minimum top-up, undertaxed payments, income inclusion, estimated, or other taxes of any kind
whatsoever, in each case including any interest, penalty, or addition thereto.
(mm)
“
Transaction Documents
” means this Agreement, the Operating Agreement, the Fee Ground Lease, the Ground Sublease,
the Assignment Agreements, the STX Intermediate Interests Assignment, the ChronoScale Lease, the Hypergate Contract, the Warrant, the
Registration Rights Agreement,
the Shared Services Agreements,
and each other agreement, document, instrument, exhibit or certificate
contemplated hereby or thereby or executed and delivered in connection herewith or therewith.
[Signature
page follows]
41
IN
WITNESS WHEREOF
, the undersigned have caused this Agreement to be duly executed as of the date first above written.
COMPANY
:
STX
JV HOLDINGS LLC
By:
/s/
Saidal Mohmand
Name:
Saidal
Mohmand
Title:
Chief
Financial Officer
ANCHOR
INVESTOR
:
APLD
STX HOLDINGS LLC
By:
/s/
Saidal Mohmand
Name:
Saidal
Mohmand
Title:
Chief
Financial Officer
ANCHOR
GUARANTOR
:
APLD
INTERMEDIATE HOLDCO LLC
By:
/s/
Saidal Mohmand
Name:
Saidal
Mohmand
Title:
Chief
Financial Officer
[
Signature
Page to Subscription Agreement
]
SAIL
INVESTOR
:
Soluna
HPC D3 STX HOLDCO, LLC
By:
/s/
John Belizaire
Name:
John
Belizaire
Title:
Chief
Executive Officer
STX
HOLDCO
:
Soluna
STX BORROWER HOLDCO, LLC
By:
/s/
John Belizaire
Name:
John
Belizaire
Title:
Chief
Executive Officer
GROUND
LESSEE:
Soluna
DV SERVICES, LLC
By:
/s/
John Belizaire
Name:
John
Belizaire
Title:
Chief
Executive Officer
SAIL
GUARANTOR:
Soluna
HOLDINGS, INC.
By:
/s/
John Belizaire
Name:
John
Belizaire
Title:
Chief
Executive Officer
[
Signature
Page to Subscription Agreement
]
EXHIBIT
A
Investor
Common
Units
Subscription
Amount
In
Kind Contribution Value
Soluna
HPC D3 STX HoldCo, LLC
18,750,000
N/A
$18,750,000
APLD
STX Holdings LLC
19,515,306
$19,515,306
N/A
A-
1
Exhibit
B
Form
of Assignment and Assumption Agreement
[to
be attached]
B-
1
ASSIGNMENT
AND ASSUMPTION AGREEMENT
This
Assignment and Assumption Agreement (this “
Agreement
”) is entered into as of [●], 2026, by and between [●],
a [Delaware limited liability company] (“
Assignor
”) and STX JV Holdings LLC, a Delaware limited liability company
(“
Assignee
”).
RECITALS
WHEREAS,
Assignor desires to assign, sell, transfer and set over to Assignee, and Assignee agrees to accept, assume and to observe and perform,
pay and discharge, all of such Assignor’s right, title and interest in and to, and all of such Assignor’s liabilities and
obligations with respect to all of Assignor’s vendor contracts, bills of material and purchase orders related to the property located
at Dorothy 3A, as listed on
Annex A
hereto.
AGREEMENT
NOW,
THEREFORE, in consideration of mutual covenants contained herein and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties agree as follows:
1.
Assignment
and Assumption
. Assignor hereby assigns, sells, transfers and sets over to Assignee, and Assignee hereby accepts, assumes and
agrees to observe and perform, pay and discharge, all of such Assignor’s right, title and interest in and to, and all of such
Assignor’s liabilities and obligations with respect to Assignor’s vendor contracts, bills of material and purchase orders
exclusively related to the property located at Dorothy 3A listed on
Annex A
hereto.
2.
Further
Assurances
. Each party hereto agrees to furnish upon request to each other party such further information, to execute and deliver
to each other party such other documents and to do such other acts and things, all as such other party may at any time reasonably
request for the purpose of carrying out the intent of this Agreement.
3.
Governing
Law; Jurisdiction.
This Agreement and all matters arising directly or indirectly from or with respect to this Agreement shall
be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to the choice of law principles
thereof. Each of the parties hereto hereby irrevocably submits to the co-exclusive jurisdiction of the federal and state courts located
in Delaware for the purpose of any suit, action, proceeding or judgment relating to or arising out of the foregoing.
4.
Entire
Understanding.
This Agreement sets forth the entire understanding of the parties hereto with respect to the subject matter hereof.
This Agreement may not be modified or amended, except by an instrument in writing, signed by the parties hereto.
5.
Binding
Effect.
This Agreement is binding upon and inures to the benefit of the parties and their respective successors and assigns.
6.
Counterparts
.
This Agreement may be executed in original or by other electronic communication (including PDF) in several counterparts and, as so
executed, shall constitute one agreement, binding on the parties hereto, notwithstanding that all of the parties are not signatory
to the original or to the same counterpart.
[SIGNATURE
PAGE FOLLOWS]
B-
2
IN
WITNESS WHEREOF, the parties have executed this Assignment and Assumption Agreement as of the day and year first above written.
ASSIGNEE
:
STX
JV HOLDINGS LLC
By:
Name:
Title:
ASSIGNOR
:
[SAIL
ENTITY] / [ANCHOR ENTITY]
By:
Name:
Title:
[
Signature
Page to Assignment and Assumption Agreement
]
B-
3
ANNEX
A
Contracts
[●]
Exhibit
C
Description
of the Land
[to
be attached]
C-
1
Exhibit
D
PROHIBITED
ACTIONS
Pursuant
to Section 8.1(b) of the Agreement, during the Interim Period, none of the Company, the Sail Investor, the Ground Lessee, the Sail Guarantor,
the Anchor Investor or the Anchor Guarantor shall, and each such Party shall cause its Subsidiaries (including, as applicable, JV Entity
Propco) not to, take any of the actions set forth below with respect to the Company or its Subsidiaries or the Project, as applicable,
other than (i) any action expressly contemplated by or required under the Agreement or any other Transaction Document or (ii) any action
taken with the prior written consent of each of the Sail Investor and the Anchor Investor (email being sufficient):
(a)
amend,
alter or repeal any provision of the certificate of formation or other organizational document of the Company or any Subsidiary thereof;
(b)
pledge,
hypothecate, encumber, or grant any lien, security interest, mortgage, charge, or other encumbrance of any kind on any equity interests
in the Company, the Sail Investor, the Ground Lessee, the Anchor Investor or any of their respective Subsidiaries, or any material
assets thereof;
(c)
(i)
issue any units, membership interests, option (including phantom options), warrant or any other right to acquire, and any other equity
securities or profits interests (or any equity securities convertible into or exercisable or exchangeable for any of the foregoing)
(“
Securities
”) or (ii) create, or authorize the creation of, any additional class or series of units or any other
Securities (including increasing the reserves for, or the adoption of any, equity or other incentive plan);
(d)
file
a voluntary petition, or initiate proceedings, to have the Company, the Sail Investor, the Ground Lessee, the Anchor Investor or
any of their respective Subsidiaries adjudicated bankrupt or insolvent; consent to the institution of bankruptcy or insolvency proceedings
against any of the foregoing; file a petition seeking or consenting to reorganization of any of the foregoing as debtor under any
applicable federal or state law relating to bankruptcy, insolvency or other relief for debtors; or seek or consent to the appointment
of any trustee, receiver, conservator, assignee, sequestrator, custodian, liquidator (or other similar official) of any of the foregoing
or of all or any substantial part of their respective properties and assets or any voluntary bankruptcy by, any of the foregoing;
(e)
liquidate,
dissolve or wind up the Company, the Sail Investor, the Ground Lessee, the Anchor Investor or any of their respective Subsidiaries;
(f)
make
any fundamental change to the nature of the business conducted by the Company, the Sail Investor, the Ground Lessee, the Anchor Investor
or any of their respective Subsidiaries;
(g)
admit
any additional member or substitute member to any of the Company, the Sail Investor, the Ground Lessee, the Anchor Investor or any
of their respective Subsidiaries;
(h)
with
respect to the Company or its Subsidiaries, acquire any equity interests in, or material assets of, any other Person(s);
D-
1
(i)
effect
any direct or indirect merger (including a merger-of-equals), acquisition, consolidation, conversion, reorganization, divisions,
splits, joint venture, assignment or other business combination, transaction or disposition relating to the Company or any of its
Subsidiaries;
(j)
sell,
divest, exchange, transfer, lease, exclusively license or otherwise dispose of the Land or the Project;
(k)
incur
(including by way of refinancing, replacement, extension or amendment), create, authorize, issue, assume or suffer to exist any indebtedness
for borrowed money or enter into any agreement assuming, guaranteeing, endorsing or otherwise as an accommodation becoming responsible
for the obligations of any Person;
provided
that the foregoing shall not restrict any costs related to work on the Land by
or at the direction of the Anchor Investor;
(l)
effect
any initial public offering or take any other actions in connection therewith with respect to the Company or any of its Subsidiaries;
(m)
make,
change or revoke any material tax election with respect to the Company or any of its Subsidiaries;
(n)
establish,
adopt, amend or modify any compensation, short term incentive plan, long-term incentive plan or benefits of any officer or employee
of the Company or any of its Subsidiaries;
(o)
engage,
hire, appoint or terminate any officer or key employee of the Company or any of its Subsidiaries;
(p)
initiate,
commence or settle any litigation; or
(q)
take
any action, or delegate the authority to take, authorize or approve, agree, make any commitment, or enter into any binding agreement
with respect to any of the foregoing matters.
D-
2
Schedule
1.1
Assigned
Project Contracts
Anchor
Investor
1.
The
Hypergate Contract.
Sail
Investor
None.
S-
1
Schedule
2.6
Company
Subsidiaries
1.
STX-01
Holdco LLC, a Delaware limited liability company, wholly-owned by the Company
2.
STX-01
LLC, a Delaware limited liability company, wholly-owned by STX-01 Holdco LLC
3.
STX-01
Landco LLC, a Delaware limited liability company, wholly-owned by STX-01 Holdco LLC
S-
2
Schedule
3.6
Soluna
Consents
The
Soluna Approvals
S-
3
Schedule
3.11
Environmental
Report
[See
attached.]
S-
4
Schedule
4.6
Applied
Consents
The
APLD Approvals
S-
5