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Item 1.01
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Entry into a Material Definitive Agreement.
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Framework Agreement
On
September 15, 2021 (the “Effective Date”), Ideanomics, Inc., a Nevada corporation (“Ideanomics”),
entered into a Framework Agreement (the “Framework Agreement”) with Energica Motor Company S.p.A., a joint stock
company incorporated under the laws of Repubic of Italy (“Energica”), CRP Meccanica S.r.l., a limited liability
company incorporated under the laws of Republic of Italy (“CRP Meccanica”), Maison ER & Cie S.a., a limited
liability company incorporated under the laws of Luxembourg (“Maison”), CRP Technology S.r.l., a limited liability
company incorporated under the laws of the Republic of Italy (“CRP Technology”), Andrea Vezzani (“Vezzani”),
Giampiero Testoni (“Testoni” and, together with CRP Meccanica, Maison, CRP Technology and Vezzani, the “Founders”
and each a “Founder”). Ideanomics, Energica and the Founders, are herein referred to collectively, as the “Parties”
and each a “Party”. Ideanomics currently owns 20% of the Energica ordinary shares which are outstanding.
Prior
to the Effective Date, the board of directors of Ideanomics has unanimously approved the Framework Agreement and the transactions contemplated
thereby.
Ideanomics
expects to launch, by acting in concert with the Founders, a voluntary and conditional public tender offer (the “Tender
Offer”) for (i) the approximately 11,107,505 ordinary shares which are in Energica’s public float for an
aggregate purchase price of approximately €35,544,016 (the “Public Float Shares”) traded on AIM
Italia, a multilateral trading facility organized and managed by Borsa Italiana (“AIM Italia”) and (ii)
the one-third of the ordinary shares owned by the Founders which consist of 2,529,731 shares held by CRP Meccanica and 2,091,940
shares held by CRP Technology (the “CRP Shares”, together with the Public Float Shares, the
“Tender Shares”) (for a whole amount of 4,621,671 shares or approximately €15,000,000 aggregate
purchase price) aimed at obtaining the delisting of Energica’s ordinary shares from AIM Italia (the
“Delisting”), with a view to increase and maximize the value of Energica in line with its growth and
development goals. The Parties have agreed that Energica’s governance in the event of a successful completion of the Tender
Offer will be governed by a separate shareholders agreement (the “Shareholders Agreement”) to be entered
into by the parties to the Shareholders Agreement, material terms of which are set forth below.
The
Tender Offer, among other things, is subject to the following terms and conditions: (a) the Tender Offer shall be a voluntary offer for
the Tender Shares traded on AIM Italia; and on all 1,037,400 warrants admitted to trading on the AIM Italia and due to expire on October
15, 2021 (the “Energica Warrants 2016-2021”), to the extent such warrants are not expired, at a price: (i) per
each Tender Share equal to the price of €3.20 per share, to be offered by Ideanomics in the Tender Offer (the “Offer
Price”); and (ii) per Energica Warrants 2016-2021 equal to €0.10; (b) the Offer Price will be paid by Ideanomics on
each date on which the Offer Price will be paid to Energica shareholders that have tendered their shares to the Tender Offer, including,
if applicable, in the context of the squeeze out procedures (the “Payment Date”) for each Tender Share tendered
to the Tender Offer; and (c) acceptances of the Tender Offer by shareholders of Energica of a minimum aggregate number of Tender Shares
such as to allow Ideanomics in concert with the Founders, to hold at the end of the period of duration of the Tender Offer to be agreed
between Ideanomics and Commissione Nazionale per le Società e la Borsa, or Consob, as possibly extended (the “Offer
Period”) at least 90% of the overall Energica voting rights (“Minimum Acceptance Level Condition”),
it being understood that if the Tender Offer does not reach an aggregate of 90% then Ideanomics will not be required to close the purchase
of any of the Tender Shares; (d) that, between the Effective Date and the Payment Date, the corporate bodies of Energica do not carry
out or undertake to carry out acts or transactions that may cause a significant deterioration, even prospectively, compared to the situation
as of the date of the financial statements as of December 31, 2020, in the capital, assets, operating, business and financial results
and/or activity of Energica; (e) that Energica or the Founders respectively do not resolve or cause to resolve, and in any event do not
execute or undertake to execute, any acts or transactions that may conflict with the pursue of the objectives of the Tender Offer, even
if such acts or transactions have been authorized by the ordinary or extraordinary shareholders’ meeting of Energica; and (f) the
non-occurrence of extraordinary circumstances or events at a national or international level that entail or may entail material adverse
changes in the political, financial, economic, currency, regulatory or market situation having prejudicial effects on the Tender Offer
or on the capital, financial, or economic situation of Energica with respect to the Tender Offer, compared to that resulting as at the
date of the financial statements as of December 31, 2020 and no facts or situations relating to Energica, not known to the market, have
arisen which would have the effect of materially prejudicing the business of Energica or its financial, asset, economic situation, compared
to that resulting as at the date of the financial statements as of December 31, 2020.
During
the Offer Period, each Party agreed that, for a 12 month period following the Effective Date (the “Lock-up Period”),
not to: (i) engage, directly or indirectly, in any sale, transfer, disposal or other transaction which has as its object or effect, directly
or indirectly, the assignment or transfer to third parties, for any reason and in any form of the shares (or other financial instruments,
which grant the right to purchase, subscribe for, convert into, or exchange for, shares or other financial instruments that grant rights
inherent in or similar to such shares or financial instruments); and (ii) not to approve and/or carry out transactions on derivative instruments,
which have the same effects, even if only economic, as the transactions referred to above, and subject to certain exceptions. In addition,
the Parties agreed not to make (or agree to make) directly or indirectly, also by means of its respective affiliates, any purchase of
shares (or other financial instruments giving the right to purchase or subscribe for them) during the period between the Effective Date
and the six months following the completion of the Tender Offer for a higher price than the Offer Price.
The
obligation of the Parties to execute the Framework Agreement and to perform the other actions required to be taken pursuant the Framework
Agreement is subject to the occurrence before October 30, 2021 (“Long Stop Date”) of the following conditions
precedent (“Conditions Precedent”): (a) the execution by Ideanomics of a standard warranty and indemnity insurance
policy, at terms and conditions in line with market practice for transactions similar to this transaction; (b) the arrangement and approval
by Energica board of directors of 2022-2024 business plan and budget. The Conditions Precedent are unilateral conditions, provided in
the sole and exclusive interest of Ideanomics, and Ideanomics has the right to unilaterally waive the aforesaid Conditions Precedent within
the Long Stop Date, in which event the Condition Precedent waived shall be considered as not provided. The Parties agreed that even if
only one of the Conditions Precedent is not met or waived within the Long Stop Date, the Framework Agreement shall automatically terminate
and shall cease to be in effect between the Parties, which shall be released from all the obligations provided for therein, subject to
certain exceptions. The Framework Agreement shall be deemed automatically terminated and without effect ex nunc (i.e., prospectively only)
on the prior date on which the Parties have announced to the market that the Minimum Acceptance Level Condition has not been fulfilled.
The
Framework Agreement contains customary representations, warranties and covenants by the Founders (including the Founder’s indemnity
obligations, subject to certain limitations) and Ideanomics. Ideanomics intends to purchase representations and warranties insurance to
insure against the risk of loss arising from the Founders’ breach of such representations, warranties and covenants. Ideanomics
has agreed to keep Energica and the Founders harmless and indemnified from any and all liabilities incurred by the same that would have
not arisen if our representations and warranties had been true and correct. Ideanomics’s indemnification obligations are subject
to certain limitations, including that in no event shall Ideanomics’s liabilities be more than €4,000,000.
The
Framework Agreement and related description are intended to provide information regarding the terms of the Framework Agreement and are
not intended to modify or supplement any factual disclosures about Ideanomics in its reports filed with the Securities and Exchange Commission.
In particular, the Framework Agreement and related description are not intended to be, and should not be relied upon as, disclosures regarding
any facts and circumstances relating to the Parties. The representations and warranties have been negotiated with the principal purpose
of not establishing matters of fact, but rather as a risk allocation method establishing the circumstances under which a party may have
the right not to consummate the transactions contemplated by the Framework Agreement if the representations and warranties of the other
party prove to be untrue due to a change in circumstance or otherwise. As is customary, the assertions embodied in the representations
and warranties made by the Parties in the Framework Agreement are qualified by information contained in confidential disclosure schedules
that Energica has delivered to Ideanomics in connection with the signing of the Framework Agreement. The representations and warranties
also may be subject to a contractual standard of materiality different from those generally applicable under the securities laws. Shareholders
of Ideanomics are not third-party beneficiaries under the Framework Agreement and should not rely on the representations, warranties and
covenants or any descriptions thereof as characterizations of the actual state of facts or condition of Ideanomics or Energica. Moreover,
information concerning the subject matter of the representations and warranties may change after the Effective Date.
The foregoing
description of the Framework Agreement and the transactions contemplated thereby do not purport to be complete and is subject to, and
qualified in its entirety by, the full text of the Framework Agreement, which will be filed as an exhibit to Ideanomics’s future
Quarterly Report on Form 10-Q or Annual Report on Form 10-K, as required.
Shareholders
Agreement
Pursuant
to the Shareholders Agreement, within 15 business days from the Delisting, Ideanomics will subscribe to the convertible notes issued
by Energica for an amount up to €8,000,000, for a duration of 60 months, at an annual interest rate of 8.00% consistent with
the financial needs of Energica as provided by the First Annual Business Plan 2022, each Annual Business Plan and the Three Year
Capital Plan (“Additional Financing”). Energica will have the right to call tranches of up to
€1,000,000 with a 30-day notice, or of a different size and timing as agreed upon by the parties to the Shareholders
Agreement. Energica agreed to reimburse the interest starting from the expiry of the first year from subscription of the convertible
notes on a monthly basis. At the maturity date, principal and outstanding interests of the convertible notes shall be reimbursed in
cash by Energica or converted into Energica share, at Ideanomics’s discretion, at a conversion price of €3.20 per
share.
The
parties to the Shareholders Agreement have also agreed to take all actions within their respective power, including, without limitation,
by voting their shares of Energica and causing their respective affiliates to vote their shares of Energica, required to cause the board
of directors of Energica (“Board”) to consist of five (5) individuals designated in writing by the parties in
accordance with the Shareholders Agreement. Ideanomics shall have the right to designate three (3) members of the Board, including the
Vice Chairman, and CRP Meccanica shall have the right to designate two (2) members of the Board, including the Chariman of the Board and
the chief executive officer. Certain material actions require the consent of holders of at least ninety percent (90%) of the share capital
of Enerica, including changes in By-laws, liquidation and mergers, demergers and other changes in corporate form.
The
Energica Shareholders agreed not to transfer, directly or indirectly, any shares held by each of them in the share capital of Energica
until the expiry of the 12th month from the execution of the Shareholders Agreement. Once the aforesaid lock-up period has
expired, the transfer by one shareholder of shares of capital stock of Energica are subject to preemptive rights of the other shareholders.
Subject to such preemptive rights, and following the lock-up period, should an Energica Shareholders (the “Tagged Shareholders”),
receive, and intend to accept, an offer to sell to a bona fide third party that is not Ideanomics, Energica and the Founders or a related
party or affiliate of Ideanomics, Energica and the Founders, their interest in Energica, in whole or in part (the “Shares
on Sale”), the other Energica Shareholders (the “Tag-Along Shareholders”) shall be entitled to
sell the shares held by the same in the share capital of Energica (the “Tag-Along Right”) at the same price
and conditions offered to the Tagged Shareholders in accordance with the provisions of the Shareholders Agreement.
The
Shareholders Agreement will remain valid and in force for the earlier of five (5) years from the date of execution of the Shareholders
Agreement or an initial public offering on a recognized stock exchange to be identified and determined in agreement by the parties (“Qualifying
IPO”), or any other liquidity event, such as a trade sale of Energica shares (jointly with the Qualifying IPO, a “Liquidity
Event”).
The
foregoing description of the Shareholders Agreement and the transactions contemplated thereby do not purport to be complete and is subject
to, and qualified in its entirety by, the full text of the Shareholders Agreement, which will be filed as an exhibit to Ideanomics’s
future Quarterly Report on Form 10-Q or Annual Report on Form 10-K, as required.
