UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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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:
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
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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.
Dalton, GA Acquisition
On February 2, 2024, CSRE Properties Dalton, LLC (“Dalton Buyer”), a wholly-owned subsidiary of CleanSpark, Inc., a Nevada corporation (the "Company"), entered into a Membership Interest Purchase Agreement (the "Dalton MIPA") with Eyas Investment Group Limited (formerly known as Coinmaker Miners Limited), a British Virgin Islands business company (the "Dalton MIPA Seller"), pursuant to which the Dalton Buyer agreed to purchase a one hundred percent (100%) membership interest in Dalton15, LLC, a Georgia limited liability company, from the Dalton MIPA Seller. Also on February 2, 2024, the Dalton Buyer entered into a Purchase and Sale Agreement (the “Dalton PSA” and, together with the Dalton MIPA, the “Dalton Agreements”) with Makerstar Capital, Inc., a Delaware corporation (the “PSA Seller” and, together with the Dalton MIPA Seller, the “Dalton Sellers”), pursuant to which the Dalton Buyer agreed to purchase from the PSA Seller approximately two (2) acres of real property (the “Dalton Property”) located in Dalton, Whitfield County, Georgia and purchase from the PSA Seller all improvements, fixtures and personal property situated on the Dalton Property.
Under the terms of the Dalton Agreements, the Dalton Buyer will pay the Dalton Sellers aggregate consideration of $3,435,000 at Closing (inclusive of amounts that will be paid to the Dalton Sellers’ contractor simultaneously with the Closing and less a $20,000 earnest money deposit delivered by the Buyer in connection with signing). Closing is subject to the satisfaction of certain conditions. In connection with the Dalton Buyer’s entry into the Dalton Agreements, the Dalton Buyer also entered into a Construction Management Services Agreement dated February 2, 2024 (the “CMSA”) with the PSA Seller, pursuant to which the Dalton Buyer has engaged the PSA Seller to manage the completion of the construction of a 15 megawatt data center facility on the Dalton Property (the “Project”) for aggregate consideration of $3,435,000, payable in three installments commencing within 30 days of the completion of the Project.
Mississippi Acquisition
On February 5, 2024, CSRE Properties Mississippi, LLC, a Mississippi limited liability company (the “Mississippi Buyer”), a wholly-owned subsidiary of the Company, entered into a Real Property Purchase and Sale Agreement with Makerstar Capital, Inc. (the “PSA Seller”) pursuant to which the Buyer agreed to purchase from the PSA Seller: (i) approximately 5 acres of real property (the “Meridian Property”) located in Meridian, Lauderdale County, Mississippi, (ii) approximately 5 acres of real property (the “Vicksburg Property”) located in Vicksburg, Warren County, Mississippi and (iii) approximately 9 acres of real property (the “Wiggins Property” and, together with the Meridian Property and the Vicksburg Property, the “Mississippi Property”) located in Wiggins, Stone County, Mississippi and purchase from the PSA Seller all improvements, fixtures and personal property situated on the Mississippi Property (altogether, the “Mississippi PSA”).
Under the terms of the Mississippi PSA, the Mississippi Buyer will pay the Sellers aggregate consideration of $10,000,000 at Closing (less a $5,000 deposit to be paid by Buyer in connection with signing), which amount is subject to adjustment in respect of any re-engineering costs (as defined in the Mississippi PSA). Closing is subject to the satisfaction of certain conditions, including the signing and delivery of a Membership Interest Purchase Agreement (the "Mississippi MIPA") with Eyas Investment Group Limited (the “Mississippi MIPA Seller”), pursuant to which the Mississippi Buyer agreed to purchase a one hundred percent (100%) membership interest in MS Data, LLC, a Mississippi limited liability company, from the Mississippi MIPA Seller, for $9,800,000. Together, the Mississippi PSA and the Mississippi MIPA aggregate to $19,800,000 total, less potential offsets previously described.
The foregoing description of the Dalton MIPA, the Dalton PSA, the CMSA, and the Mississippi PSA (collectively, the “Agreements”) and the transactions contemplated thereby do not purpose to be complete and is qualified in its entirety by reference to the full text of the Agreements, copies of which are attached hereto as Exhibit 10.1 through 10.4, and incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On February 6, 2024 the Company issued a press release announcing the entry into the Agreements and the transactions contemplated thereby. A copy of this press release is attached as Exhibit 99.1 and is being furnished with this Current Report on Form 8-K ("Current Report").
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. |
Description |
10.1 |
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10.2 |
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10.3 |
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10.4 |
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99.1 |
Press Release, dated as of February 6, 2024 (furnished herewith) |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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CLEANSPARK, INC. |
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Date: |
February 6, 2024 |
By: |
/s/ Zachary Bradford |
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Name: Zachary Bradford |
EXECUTION VERSION
MEMBERSHIP INTEREST PURCHASE AGREEMENT
This Membership Interest Purchase Agreement (this “Agreement”) dated effective as of February 2, 2024 (the “Effective Date”), by and between Eyas Investment Group Limited, formerly known as Coinmaker Miners Limited, a British Virgin Islands business company (“Seller”), and CSRE Properties Dalton, LLC, a Georgia limited liability company (“Buyer”). Each of the Seller and the Buyer are referred to individually herein as a “Party” and collectively herein as the “Parties”.
RECITALS
WHEREAS, Seller owns all of the issued and outstanding membership interests (the “Membership Interests”) of Dalton15, LLC, a Georgia limited liability company (the “Company”); and
WHEREAS, Seller wishes to sell the Membership Interests to Buyer, and Buyer wishes to purchase the Membership Interests from Seller, subject to the terms and conditions of this Agreement.
NOW THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound, hereby agree as follows:
The terms defined in this Article I shall, for all purposes of this Agreement, have the following respective meanings (all terms used in this Agreement that are not defined in this Article I shall have the meanings as set forth elsewhere in this Agreement):
“Action” means any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, civil, criminal, administrative, regulatory or otherwise, whether at law or in equity.
“Affiliate” of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
“Assignment” shall have the meaning set forth in Section 3.2(a)(i).
“Business Day” means any day except Saturday, Sunday or any other day on which commercial banks located in Georgia are authorized or required by Law to be closed for business.
“Code” means the Internal Revenue Code of 1986, as amended.
“Confidential Information” means any and all data and information relating to the Company, including, without limitation, information relating to the Company’s cryptocurrency mining facilities, its activities, business, or customers that (i) was disclosed to Seller or of which Seller became aware as a consequence of its ownership of, management or, or other involvement with the Company; (ii) has value to the Company itself; and (iii) is not generally known outside of Seller. “Confidential Information” also includes, without limitation, the following types of information regarding, related to, or concerning the cryptocurrency mining facility: trade secrets; product lists and specifications; data; know how; formulae; compositions; processes; designs; sketches; graphs; drawings; samples; inventions and ideas; past, current and planned research and development; current and planned sales and marketing methods and processes; loyalty program information; customer lists, current and anticipated customer requirements; price lists and pricing policies; market studies (including analysis of new markets and locations); business plans; improvements; information and competitive strategies; historical financial statements; financial projections and budgets; historical and projected sales; capital spending budgets and plans; the names and backgrounds of key personnel, contractors, agents, suppliers and potential suppliers; personnel training and related techniques and materials; purchasing methods and related techniques; information regarding competitors; and any and all notes, analysis, compilations, studies, summaries and other material prepared by or for Seller containing or based, in whole or in part, upon any information included in the foregoing. “Confidential Information” also includes combinations of information or materials which individually may be generally known outside of the Seller, but for which the nature, method, or procedure for combining such information or materials is not generally known outside of Seller. In addition to data and information relating to the cryptocurrency mining facility, “Confidential Information” also includes any and all data and information relating to or concerning a third party that otherwise meets the definition set forth above, that was provided or made available to Seller by such third party, and that the Seller has a duty or obligation to keep confidential. This definition does not limit any definition of “confidential information” or any equivalent term under state or federal law. “Confidential Information” does not include information that (i) has become generally known by and available to the public by the act of one who has the right to disclose such information without violating any right or privilege of Buyer, and (ii) that is otherwise in the public domain or generally known in the crypto mining industry other than by violation of any confidentiality agreement or similar obligation.
“Construction Agreement” means that certain letter agreement relating to 50’X280’ Building, dated as of July 5, 2023, revised on August 29, 2023 and countersigned on October 17, 2023, by and between the Contractor and the Coinmaker Capital Inc..
“Construction Assignment and Consent” means the assignment of that certain (i) Construction Agreement from Coinmaker Capital Inc. to the Company and consent of the Contractor thereunder with respect to the change of control of the Company and (ii) Dalton Agreement, in each case, in form and substance satisfactory to Buyer.
“Construction Management Services Agreement” means that certain Construction Management Services Agreement dated as of the date hereof, between Makerstar and Buyer pursuant to which Makerstar shall oversee and be responsible for the completion of the building
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arising under the Construction Agreement, including the utilization and placement of the assets as set forth in more detail therein.
“Contractor” means Felker Construction Co., Inc.
“Contractor Payments” means each of the payments owed to the Contractor (and/or any secondary contractor, subcontractor or other delegee of the Contractor) and set forth on Exhibit A attached hereto.
“Contracts” means all contracts, purchasing orders and agreements, leases, deeds, mortgages, licenses, instruments, notes, commitments, undertakings, indentures, joint ventures and all other agreements, commitments and legally binding arrangements, whether written or oral.
“Dalton Agreement” means that certain Dalton Service Company Quotation letter agreement, dated October 25, 2023, by and between Dalton Service Company and Coinmaker Capital Inc..
“Disclosure Schedules” means the Disclosure Schedules delivered by Seller concurrently with the execution and delivery of this Agreement.
“Encumbrance” means any charge, claim, preemptive right, pledge, condition, equitable interest, lien (statutory or other), option, security interest, mortgage, easement, encroachment, right of way, right of first refusal, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income or exercise of any other attribute of ownership.
“Environmental Claim” means any Action, Governmental Order, lien, fine, penalty, or, as to each, any settlement or judgment arising therefrom, by or from any Person alleging Liability of whatever kind or nature (including Liability or responsibility for the costs of enforcement proceedings, investigations, cleanup, governmental response, removal or remediation, natural resources damages, property damages, personal injuries, medical monitoring, penalties, contribution, indemnification and injunctive relief) arising out of, based on or resulting from: (a) the presence, Release of, or exposure to, any Hazardous Materials; or (b) any actual or alleged non-compliance with any Environmental Law or term or condition of any Environmental Permit.
“Environmental Law” means any applicable Law, and any Governmental Order or binding agreement with any Governmental Authority: (a) relating to pollution (or the cleanup thereof) or the protection of natural resources, endangered or threatened species, human health or safety, or the environment (including ambient air, soil, surface water or groundwater, or subsurface strata); or (b) concerning the presence of, exposure to, or the management, manufacture, use, containment, storage, recycling, reclamation, reuse, treatment, generation, discharge, transportation, processing, production, disposal or remediation of any Hazardous Materials.
“Environmental Notice” means any written directive, notice of violation or infraction, or notice respecting any Environmental Claim relating to actual or alleged non-compliance with any Environmental Law or any term or condition of any Environmental Permit.
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“Environmental Permit” means any Permit, letter, clearance, consent, waiver, closure, exemption, decision or other action required under or issues, granted, given, authorized by or made pursuant to Environmental Law.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“ERISA Affiliate” means each entity that is treated as a single employer with the Company for purposes of Code § 414.
“Excluded Liability” means any Liability of the Company arising from any business, operation, activity, property or other asset conducted or owned prior to the Closing.
“Governmental Authority” means any federal, state, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction.
“Governmental Order” means any order, court opinion, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.
“Hazardous Materials” means: (a) any material, substance, chemical, waste, product, derivative, compound, mixture, solid, liquid, mineral or gas, in each case, whether naturally occurring or manmade, that is hazardous, acutely hazardous, toxic, or words of similar import or regulatory effect under Environmental Laws; and (b) any petroleum or petroleum-derived products, radon, radioactive materials or wastes, asbestos in any form, lead or lead-containing materials, urea formaldehyde foam insulation, per- and polyfluoroalkyls, and polychlorinated biphenyls.
“Indebtedness” of any Person means, without duplication, (i) the principal and accrued and unpaid interest, prepayment and redemption premiums or penalties (if any), unpaid fees or expenses and other monetary obligations in respect of (A) indebtedness of such Person for money borrowed and (B) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of which such Person is responsible or liable; (ii) all obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations of such Person and all obligations of such Person under any title retention agreement; (iii) all obligations of such Person under leases required to be capitalized in accordance with historical practices; (iv) all obligations of such Person for the reimbursement of any obligor on any letter of credit, banker’s acceptance or similar credit transaction; (v) all obligations of such Person under interest rate or currency swap transactions (valued at the termination value thereof); (vi) all obligations of the type referred to in clauses (i) through (v) of any Persons for the payment of which such Person is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise, including guarantees of such obligations; and (vii) all obligations of the type referred to in clauses (i) through (vi) of other Persons secured by (or for which the holder of such obligations has an existing right, contingent or otherwise, to be secured by) any Encumbrance on any property or asset of such Person (whether or not such obligation is assumed by such Person).
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“Indemnified Taxes” means (a) all Taxes of the Seller; (b) all Taxes of Company, or relating to the Business of the Company, for all Pre-Closing Tax Periods; (c) all Taxes of any member of an affiliated, consolidated, combined or unitary group of which the Company (or any predecessor of the Company) is or was a member on or prior to the Closing Date by reason of a liability under Treasury Regulation Section 1.1502-6 or any comparable provisions of foreign, state or local Law; (d) any and all Taxes of any Person imposed on the Company arising under the principles of transferee or successor liability or by contract, relating to an event or transaction occurring before the Closing Date; (e) any withholding Taxes imposed in connection with the transaction contemplated by this Agreement and (f) any Transfer Taxes.
“Intellectual Property” means (i) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all patents and patent applications, together with all reissuances, continuations, continuations-in-part, revisions, extensions, and reexaminations thereof, (ii) all trademarks, service marks, trade dress, logos, trade names, domain names, social media handles or accounts, and corporate names, together with all translations, adaptations, derivations, and combinations thereof and including all goodwill associated therewith, and all applications, registrations and renewals in connection therewith, (iii) all copyrights, and all applications, registrations, and renewals in connection therewith, (iv) all trade secrets and confidential business information (including ideas, research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, designs, drawings, specifications, technical data, customer and supplier lists, pricing and cost information, and business and marketing plans and proposals), (v) all computer software, (vi) all database rights, (vii) all design rights and registered designs and all documentation and media constituting or describing any of the foregoing and all copies and tangible embodiments thereof (in whatever form or medium and whether or not any of the foregoing is registered), and (viii) all other proprietary rights, including all moral rights, pertaining to any product or service designed, manufactured, sold, distributed, marketed, used, performed, employed or exploited, and all rights or forms of protection of a similar nature or having equivalent or similar effect to any of those which may subsist anywhere in the world, owned by or registered in the name of any Person or in which any Person has any rights, licenses or immunities.
“Knowledge of Seller” or “Seller’s Knowledge” or any other similar knowledge qualification, means the knowledge of any director or officer of Seller, after reasonable and due inquiry.
“Law” means any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree, other requirement or rule of law of any Governmental Authority.
“Liability” means the amount of any actual liability or obligation of whatever kind or nature (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due), including any liability for Taxes.
“Losses” means losses, damages, Taxes, Liabilities, deficiencies, judgments, interest, awards, penalties, fines, costs or expenses of whatever kind, including reasonable attorneys’ fees and the cost of enforcing any right to indemnification hereunder or under any other Transaction Document and the cost of pursuing any insurance providers.
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“Makerstar” means Makerstar Capital, Inc., a Delaware corporation.
“Material Adverse Effect” means any effect, change, event, or circumstance that, individually or together with any other effects, changes events, or circumstances, has or would reasonably be expected to have a material adverse impact on the Company or its assets, operations, or condition of its business in any manner.
“Membership Interests” has the meaning set forth in the Recitals.
“Ordinary Course of Business” means consistent with the past, lawful practice of the Business by the Company and, in any event, in a manner no less than as necessary to ensure compliance with Law in all material respects.
“Organizational Document” means, relative to any Person that is not an individual, its certificate of incorporation, its certificate of formation, its certificate of partnership, its by-laws, its partnership agreement, its limited liability company agreement, its memorandum or articles of association, share designations or similar organization documents and all shareholder agreements, voting trusts and similar arrangements applicable to any of its authorized equity securities, as applicable.
“Permits” means all permits, licenses, franchises, approvals, authorizations, registrations, certificates, variances and similar rights obtained, or required to be obtained, from Governmental Authorities.
“Person” means an individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association or other entity.
“Pre-Closing Tax Period” means any taxable period ending on or before the Closing Date and, with respect to any taxable period beginning before and ending after the Closing Date, the portion of such taxable period ending on and including the Closing Date.
“Real Estate Purchase Agreement” means that certain Purchase, Sale and Guaranty Agreement, dated as of the date hereof, by and between Makerstar, as seller, and Buyer.
“Release” means any actual or threatened release, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, abandonment, disposing or allowing to escape or migrate into or through the environment (including, without limitation, ambient air (indoor or outdoor), surface water, groundwater, land surface or subsurface strata or within any building, structure, facility or fixture).
“Representative” means, with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person.
“Seller Closing Payment” shall mean the Purchase Price minus the Contractor Payments.
“Tax Return” means any return, declaration, report, claim for refund, information return or statement or other document relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.
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“Taxes” means (a) all U.S. federal, state, local, or foreign. income, franchise, profits or gross receipts, ad valorem, value added, capital gains, sales, goods and services, use, real or personal property, unclaimed or abandoned property liability or obligation (whether delineated as a tax), escheat liability or obligation (whether delineated as a tax), capital stock, capital, alternative minimum, license, registration, branch, payroll, estimated, withholding, employment, excise, severance, privilege, stamp, occupation, premium, windfall profits, environmental, social security (or similar), unemployment compensation, disability, transfer, gains and any other taxes (and any levies, fees, imposts, duties, governmental charges, assessments, obligations or tariffs in the nature of a tax) of any kind whatsoever, together with any interest, fines, assessments, penalties or additions to tax imposed in connection therewith or with respect thereto; and any interest in respect of such additions or penalties and (b) any liability for the payment of any items described in clause (a) above as a result of being (or ceasing to be) a member of an affiliated, consolidated, combined, unitary, or other group for Tax purposes (or being included (or being required to be included) in any Tax Return related to such group), as a transferee or successor, by Contract, pursuant to any Law or otherwise.
“Transaction Documents” means this Agreement, the Construction Assignment and Consent, the Real Estate Purchase Agreement, the Construction Management Services Agreement, the Assignment and the Officer’s Certificate.
“Transaction Fees” means, without duplication, the following unpaid fees, expenses and other similar amounts that have been or are expected to be incurred on or prior to the Closing Date on behalf of the Seller or Buyer: (i) the fees and disbursements of, or other similar amounts charged by, counsel to the Seller or Buyer, as applicable; (ii) the reasonable fees and expenses of, or other similar amounts charged by, any accountants, agents, financial advisors, consultants and experts employed by the Seller or the Buyer, as applicable; and (iii) all other costs or other expenses incurred by the Seller or Buyer, as applicable, in connection with or as a result of the transactions contemplated by this Agreement.
“Treasury Regulations” means the regulations promulgated under the Code, as amended and in effect from time to time.
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Except as set forth in the correspondingly numbered Section of the Disclosure Schedules, Seller represents and warrants to Buyer as follows:
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Buyer represents and warrants to Seller as follows:
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For the sole purpose of determining Losses (and not for determining whether or not any breaches of representations or warranties have occurred), the representation or warranty shall be determined without regard to any materiality, material adverse effect or other similar qualification contained in or otherwise applicable to such representation or warranty.
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If to Buyer:
CleanSpark, Inc.
10624 S Eastern Ave Ste A-638
Henderson, NV 89052
Attn: Leighton Koehler, General Counsel
Email: lkoehler@cleanspark.com
With a copy to (which shall not constitute notice):
Cozen O’Connor
1650 Market Street, Suite 2800
Philadelphia, Pennsylvania 19103
Attn: Joseph C. Bedwick
Email: jbedwick@cozen.com
If to Seller: |
MakerStar Capital Inc. |
with a copy to: |
MakerStar Capital Inc. |
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Irvine, CA 92614
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[Signatures contained on following page.]
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the date first written above.
BUYER: |
SELLER: |
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CSRE PROPERTIES DALTON LLC |
EYAS INVESTMENT GROUP LIMITED |
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By: /s/ Zachary Bradford |
By: /s/ Shengyin Chen |
Name: Zachary Bradford, CEO of CleanSpark Inc. |
Name: Shengyin Chen |
Title: Manager |
Title: CEO |
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PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is dated as of the Effective Date (as defined below), by and between Makerstar Capital, Inc., a Delaware corporation (the “Seller”), and CSRE Properties Dalton, LLC, a Georgia limited liability company (the “Buyer”). The date this Agreement is executed by the last of Buyer and Seller shall be the “Effective Date” hereof.
IN CONSIDERATION of the respective agreements hereinafter set forth, Seller and Buyer agree as follows:
All of the items referred to in Sections 1(a) - (d) above are hereinafter collectively referred to as the “Property”.
THE PARTIES HAVE AGREED THAT SELLER’S ACTUAL DAMAGES, IN THE EVENT OF A FAILURE TO CONSUMMATE THIS SALE BECAUSE OF A BUYER DEFAULT WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE. AFTER NEGOTIATION, THE PARTIES HAVE AGREED THAT, CONSIDERING ALL THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT, THE AMOUNT OF THE DEPOSIT IS A REASONABLE ESTIMATE OF THE DAMAGES THAT SELLER WOULD INCUR IN SUCH EVENT; PROVIDED, HOWEVER, THAT THIS PROVISION WILL NOT LIMIT SELLER’S RIGHT TO RECEIVE REIMBURSEMENT FOR ATTORNEYS’ FEES NOR SELLER’S RIGHTS TO BUYER’S EXPRESS INDEMNITY OBLIGATIONS UNDER THIS AGREEMENT. BY PLACING ITS INITIALS BELOW, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED, AT THE TIME THIS AGREEMENT WAS MADE, THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION.
INITIALS: Seller _/s/__ Buyer _/s/__
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All such exceptions listed in Sections 3(a) are defined herein as the “Permitted Exceptions”, and the title policy described in this Section 3 is defined herein as the “Title Policy”. Notwithstanding the foregoing, (i) deeds of trust and/ or mortgages, mechanic’s liens or other monetary liens or encumbrances on the Property (collectively, “Liens”), (ii) property taxes and assessments that may become delinquent prior to Closing and (iii) exceptions or encumbrances to title which are affirmatively created by Seller without the consent of Buyer after the date of this Agreement (collectively, “Excluded Exceptions”) shall not be Permitted Exceptions hereunder, whether Buyer gives written notice of such or not, and shall be paid off, satisfied, discharged, cured and/or removed by Seller at or before Closing, the same being a condition precedent for the benefit of Buyer. Buyer may elect at Closing to effect cure of any Excluded Exceptions not cured by Seller by payment, from the proceeds otherwise constituting the Purchase Price, of amounts required to satisfy and cure such Excluded Exceptions.
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Buyer covenants to use good faith efforts to obtain the approvals, if any, required by paragraphs (vi), (vii) and (viii) above, prior to Closing. The Closing pursuant to this Agreement shall be deemed a waiver by Buyer of all unfulfilled conditions hereunder benefiting Buyer.
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For purposes of this Agreement, whenever the phrase “to Seller’s knowledge” is used, it shall refer to the actual knowledge of Shengyin Chen, Alex Wang, and the officers of Makerstar Capital, Inc., for the Property, after reasonable and diligent inquiry and investigation.
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Seller hereby irrevocably waives, to the fullest extent permitted by applicable law, any defenses it may now or hereafter have in any way relating to any or all of the following:
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Seller acknowledges that it will receive substantial direct and indirect benefits from the transactions contemplated by the MIPA and that the waivers set forth in this guaranty are knowingly made in contemplation of such benefits. The obligations of Seller under this Section 11 are separate and independent of its obligations to convey the Property pursuant to the remainder of this Agreement, and shall survive the Closing and termination of this Agreement.
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If to Seller: |
MakerStar Capital Inc. 4 Park Plaza, Ste 1230 |
with a copy to: |
MakerStar Capital Inc. |
If to Buyer: |
CSRE Properties Dalton, LLC |
with a copy to: |
Cozen O'Connor 1717 Main Street, Suite 3100 Dallas, TX 75238 Attention: Steven P. Katkov, Esq. Email: skatkov@cozen.com |
or such other address as either party may from time to time specify in writing delivered to the other in accordance with this Section 14(a).
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{Signatures Follow}
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date(s) written below next to their respective signatures.
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BUYER: |
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Date: 2/2/2024 |
CSRE PROPERTIES DALTON, LLC |
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a Georgia limited liability company |
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By: CleanSpark, Inc., a Nevada corporation |
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Its: Sole Member and Manager |
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By: /s/ Zachary Bradford |
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Zach Bradford, Chief Executive Officer |
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SELLER: |
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Date: 2/2/2024 |
MAKERSTAR CAPITAL, INC. |
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a Delaware corporation |
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By: /s/ Steven Yan |
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Name: Steven Yan |
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Its: CEO |
BY EXECUTION HEREOF, THE UNDERSIGNED ESCROW HOLDER HEREBY COVENANTS AND AGREES TO BE BOUND BY THE TERMS OF THIS AGREEMENT.
LAND SERVICES USA, LLC
By:______________________
Its:______________________
Date:____________________
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EXHIBIT A
Depiction of the Real Property
EXHIBIT B
Legal Description of the Real Property
All that tract or parcel of land lying and being in Land Lot No. 48 in the 13th District and 3rd Section of Whitfield County, Georgia, being a part of Tract 15B of the Whitfield Properties Industrial Park, Phase I, according to plat thereof recorded in Plat Cabinet C, Slide 1572, in the Office of the Clerk of the Superior Court of Whitfield County, Georgia, and being more particularly described as follows:
Beginning at the point of intersection of the west right of way line of Enterprise Drive with the south right of way line of Howell Drive; thence south 02 degrees 38 minutes 53 seconds west, as measured along the west right of way line of Enterprise Drive, 364.54 feet to a point; thence south 88 degrees 35 minutes 32 seconds west 300.21 feet to a point; thence north 02 degrees 38 minutes 52 seconds east 379.21 feet to a point in the south right of way line of Howell Drive; thence south 87 degrees 30 minutes 35 seconds east along the southerly right of way of Howell Drive 128.16 feet to a point; thence continuing along the southerly right of way of Howell Drive an arc distance of 171.87 feet to the point of beginning.
LESS AND EXCEPT all that tract of land taken by condemnation styled Whitfield County, Georgia vs. The Duckett Corporation re Civil Action File No. 12-CI-1220-M, as evidenced by Consent Final Judgment, dated June 18, 2014, recorded June 18, 2014, and recorded in Deed Book 6047, Page 156, Whitfield County, Georgia Records.
[Redacted Exhibits C and forward, not material documents]
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CONSTRUCTION MANAGEMENT SERVICES AGREEMENT
THIS AGREEMENT is entered into as of the 1st day of February 2024, by and between Makerstar Capital, Inc. (“Construction Manager”), and CSRE Properties Dalton, LLC (“Owner”) (this “Agreement”).
WHEREAS, Owner is an owner and operator of data center facilities; and
WHEREAS, Construction Manager specializes in sourcing, developing, building, and selling data center facilities; and
WHEREAS, Construction Manager, through its affiliates, was the prior owner of certain real property and assets, including construction contracts (individually and collectively, the “Construction Contract”) with Felker Construction Co., Inc. and Dalton Service Co. (individually and collectively, the “Contractor”), for the construction of a 15 MW data center facility on Howell Drive, in Whitfield County, Georgia (the “Project”); and
WHEREAS, under separate transactions, including a Purchase and Sale Agreement and a Membership Interest Purchase Agreement of this same date, both of which are incorporated herein by reference, Owner, directly and through its affiliates, has purchased the real property and assets and is assuming the Construction Contract for the Project; and
WHEREAS, Owner desires to engage Construction Manager to manage the Project, including, but not limited to, overseeing the build-out, Project safety, tracking of delivery and deployment of fixtures, equipment and materials from the current state of the Project to final completion, together with the provision of all necessary services and to prepare deliverables that are described in the scope of services and to ensure the construction of the Project meets or exceeds the minimum specifications, standards and requirements set forth in Exhibit A (collectively, the “Services”) in connection with the Project; and
WHEREAS, Construction Manager is willing to perform the Services for Owner, subject to the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual promises contained herein, the parties agree as follows:
specifications and standards set forth herein and in Exhibit A, which is attached hereto and incorporated by reference, and includes the usual and customary construction phase services. Exhibit A is attached solely for the purpose of describing the Services to be performed by Construction Manager and setting forth certain minimum specifications and standards to which the construction must meet or exceed. In the event of a conflict between this Agreement and Exhibit A, this Agreement shall govern and control. Construction Manager may subcontract some
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of the Services to be performed by Construction Manager; provided, however, Construction Manager must obtain Owner’s advance written consent before subcontracting Services, and Construction Manager shall remain responsible for all Services, whether performed by Construction Manager or by a subcontractor or consultant to Construction Manager.
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If to Owner:
Leighton Koehler
General Counsel
CleanSpark
10624 S. Eastern Ave. A-638
Henderson, NV 89052
lkoehler@cleanspark.com
If to Construction Manager:
Alex Wang
COO
Makerstar Capital, Inc.
4 Park Plaza, Ste 1230
Irvine, CA 92614
Either party may change the recipient or address for receiving notices upon written notice to the other party.
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EXHIBIT “A” – Scope of Services
EXHIBIT “B” – Schedule
EXHIBIT “C” – Partial Waiver and Release of Liens and Claims
EXHIBIT “D” – Final Waiver and Release of Liens and Claims
EXHIBIT “E” – Certificate of Insurance
[SIGNATURES APPEAR ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives or agents as of the day and year first hereinabove written.
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CSRE Properties Dalton, LLC |
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By: /s/ Zachary Bradford |
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Name, Title: Zachary Bradford |
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CEO of CleanSpark Inc. as Manager |
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Makerstar Capital, Inc. |
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By: /s/ Steven Yan |
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Name, Title: Steven Yan, CEO |
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PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is dated as of the 5th day of February, 2024 (“Effective Date”) by and between Makerstar Capital, Inc., a Delaware corporation (the “Seller”), and CSRE Properties Mississippi, LLC, a Mississippi limited liability company (the “Buyer”).
IN CONSIDERATION of the respective agreements hereinafter set forth, Seller and Buyer agree as follows:
All of the items referred to in Sections 1(a) - (d) above are hereinafter collectively referred to as the “Property”.
THE PARTIES HAVE AGREED THAT SELLER’S ACTUAL DAMAGES, IN THE EVENT OF A FAILURE TO CONSUMMATE THIS SALE BECAUSE OF A BUYER DEFAULT WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE. AFTER NEGOTIATION, THE PARTIES HAVE AGREED THAT, CONSIDERING ALL THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT, THE AMOUNT OF THE DEPOSIT IS A REASONABLE ESTIMATE OF THE DAMAGES THAT SELLER WOULD INCUR IN SUCH EVENT; PROVIDED, HOWEVER, THAT THIS PROVISION WILL NOT LIMIT SELLER’S RIGHT TO RECEIVE REIMBURSEMENT FOR ATTORNEYS’ FEES NOR SELLER’S RIGHTS TO BUYER’S EXPRESS INDEMNITY OBLIGATIONS UNDER THIS AGREEMENT. BY PLACING ITS INITIALS BELOW, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED, AT THE TIME THIS AGREEMENT WAS MADE, THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION.
INITIALS: Seller _/s/___ Buyer _/s/__
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All such exceptions listed in Sections 3(a) are defined herein as the “Permitted Exceptions”, and the title policy described in this Section 3 is defined herein as the “Title Policy”. Notwithstanding the foregoing, (i) deeds of trust and/ or mortgages, mechanic’s liens or other monetary liens or encumbrances on the Property (collectively, “Liens”), (ii) property taxes and assessments that may become delinquent prior to Closing and (iii) exceptions or encumbrances to title which are affirmatively created by Seller without the consent of Buyer after the date of this Agreement (collectively, “Excluded Exceptions”) shall not be Permitted Exceptions hereunder, whether Buyer gives written notice of such or not, and shall be paid off, satisfied, discharged, cured and/or removed by Seller at or before Closing, the same being a condition precedent for the benefit of Buyer. Buyer may elect at Closing to effect cure of any Excluded Exceptions not cured by Seller by payment, from the proceeds otherwise constituting the Purchase Price, of amounts required to satisfy and cure such Excluded Exceptions.
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Buyer covenants to use good faith efforts to obtain the approvals, if any, required by paragraphs (vi), (vii) and (viii) above, prior to Closing. The Closing pursuant to this Agreement shall be deemed a waiver by Buyer of all unfulfilled conditions hereunder benefiting Buyer.
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For purposes of this Agreement, whenever the phrase “to Seller’s knowledge” is used, it shall refer to the actual knowledge of Shengyin Chen, Alex Wang, and the officers of Makerstar Capital, Inc., for the Property, after reasonable and diligent inquiry and investigation.
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Seller hereby irrevocably waives, to the fullest extent permitted by applicable law, any defenses it may now or hereafter have in any way relating to any or all of the following:
Seller acknowledges that it will receive substantial direct and indirect benefits from the transactions contemplated by the MIPA and that the waivers set forth in this guaranty are knowingly made in contemplation of such benefits. The obligations of Seller under this Section 11 are separate and independent of its obligations to convey the Property pursuant to the remainder of this Agreement, and shall survive the Closing and termination of this Agreement.
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If to Seller: |
MakerStar Capital Inc. 4 Park Plaza, Ste 1230 |
with a copy to: |
MakerStar Capital Inc. |
If to Buyer: |
CSRE Properties Mississippi, LLC
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with a copy to: |
Cozen O'Connor 1717 Main Street, Suite 3100 Dallas, TX 75238 Attention: Steven P. Katkov, Esq. Email: skatkov@cozen.com |
or such other address as either party may from time to time specify in writing delivered to the other in accordance with this Section 14(a).
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* * * * * *
{Signatures Follow}
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date(s) written below next to their respective signatures.
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SELLER: |
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Date: 2/5/2024 |
MAKERSTAR CAPITAL, INC. |
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a Delaware corporation |
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/s/ Steven Yan |
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Name: Steven Yan |
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Its: CEO |
[Seller signature page to Purchase and Sale Agreement – Mississippi properties]
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BUYER: |
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Date: 2/5/2024 |
CSRE PROPERTIES MISSISSIPPI, LLC. |
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a Mississippi limited liability company |
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/s/ Zachary Bradford |
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Name: Zachary Bradford, CEO, Cleanspark, Inc. |
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Its: Manager |
BY EXECUTION HEREOF, THE UNDERSIGNED ESCROW HOLDER HEREBY COVENANTS AND AGREES TO BE BOUND BY THE TERMS OF THIS AGREEMENT.
LAND SERVICES USA, LLC
By:______________________
Its:______________________
Date:____________________
[Buyer signature page to Purchase and Sale Agreement – Mississippi properties]
EXHIBIT A
Description of the Real Property
County |
Municipality |
Tax Parcel Number |
Tax Assessor Address |
Lauderdale |
Meridian |
084193000000000300 |
2905 South Frontage Road |
Warren |
Vicksburg |
124 20 1562 000303 |
1000 Rubber Way |
Stone |
Wiggins |
107A-01-026.000 |
735 Hall Street |
EXHIBIT G
Membership Interest Purchase Agreement
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FORM OF MEMBERSHIP INTEREST PURCHASE AGREEMENT
This Membership Interest Purchase Agreement (this “Agreement”) dated effective as of [_], 2024 (the “Effective Date”), by and between [_], a [_] (“Seller”), and CSRE Properties Mississippi, LLC, a Mississippi limited liability company (“Buyer”). Each of the Seller and the Buyer are referred to individually herein as a “Party” and collectively herein as the “Parties”.
RECITALS
WHEREAS, Seller owns all of the issued and outstanding membership interests (the “Membership Interests”) of MS Data LLC, a Mississippi limited liability company (the “Company”); and
WHEREAS, Seller wishes to sell the Membership Interests to Buyer, and Buyer wishes to purchase the Membership Interests from Seller, subject to the terms and conditions of this Agreement.
NOW THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound, hereby agree as follows:
The terms defined in this Article I shall, for all purposes of this Agreement, have the following respective meanings (all terms used in this Agreement that are not defined in this Article I shall have the meanings as set forth elsewhere in this Agreement):
“Action” means any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, civil, criminal, administrative, regulatory or otherwise, whether at law or in equity.
“Affiliate” of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
“Assignment” shall have the meaning set forth in Section 3.2(a)(i).
“Business Day” means any day except Saturday, Sunday or any other day on which commercial banks located in Mississippi are authorized or required by Law to be closed for business.
“Code” means the Internal Revenue Code of 1986, as amended.
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“Confidential Information” means any and all data and information relating to the Company, including, without limitation, information relating to the Company’s cryptocurrency mining facilities, its activities, business, or customers that (i) was disclosed to Seller or of which Seller became aware as a consequence of its ownership of, management or, or other involvement with the Company; (ii) has value to the Company itself; and (iii) is not generally known outside of Seller. “Confidential Information” also includes, without limitation, the following types of information regarding, related to, or concerning the cryptocurrency mining facility: trade secrets; product lists and specifications; data; know how; formulae; compositions; processes; designs; sketches; graphs; drawings; samples; inventions and ideas; past, current and planned research and development; current and planned sales and marketing methods and processes; loyalty program information; customer lists, current and anticipated customer requirements; price lists and pricing policies; market studies (including analysis of new markets and locations); business plans; improvements; information and competitive strategies; historical financial statements; financial projections and budgets; historical and projected sales; capital spending budgets and plans; the names and backgrounds of key personnel, contractors, agents, suppliers and potential suppliers; personnel training and related techniques and materials; purchasing methods and related techniques; information regarding competitors; and any and all notes, analysis, compilations, studies, summaries and other material prepared by or for Seller containing or based, in whole or in part, upon any information included in the foregoing. “Confidential Information” also includes combinations of information or materials which individually may be generally known outside of the Seller, but for which the nature, method, or procedure for combining such information or materials is not generally known outside of Seller. In addition to data and information relating to the cryptocurrency mining facility, “Confidential Information” also includes any and all data and information relating to or concerning a third party that otherwise meets the definition set forth above, that was provided or made available to Seller by such third party, and that the Seller has a duty or obligation to keep confidential. This definition does not limit any definition of “confidential information” or any equivalent term under state or federal law. “Confidential Information” does not include information that (i) has become generally known by and available to the public by the act of one who has the right to disclose such information without violating any right or privilege of Buyer, and (ii) that is otherwise in the public domain or generally known in the crypto mining industry other than by violation of any confidentiality agreement or similar obligation.
“Contracts” means all contracts, purchasing orders and agreements, leases, deeds, mortgages, licenses, instruments, notes, commitments, undertakings, indentures, joint ventures and all other agreements, commitments and legally binding arrangements, whether written or oral.
“Disclosure Schedules” means the Disclosure Schedules delivered by Seller concurrently with the execution and delivery of this Agreement.
“Electric Service Agreements” means that certain (i) Contract For Electric Service, dated July 2, 2023, between Mississippi Power Company and Makerstar, relating to 735 Hall Street, Wiggins, 39588, (ii) Contract For Electric Service, dated July 11, 20223, between Mississippi Power Company and Makerstar, relating to 2905 S. Frontage Road, Meridian, MS 39301 and (iii) Agreement for Electric Service, dated June 28, 2022, between Entergy Mississippi, LLC and Makerstar, relating to 1000 Rubber Way Road, Vicksburg, MS 39180.
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“Encumbrance” means any charge, claim, preemptive right, pledge, condition, equitable interest, lien (statutory or other), option, security interest, mortgage, easement, encroachment, right of way, right of first refusal, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income or exercise of any other attribute of ownership.
“Environmental Claim” means any Action, Governmental Order, lien, fine, penalty, or, as to each, any settlement or judgment arising therefrom, by or from any Person alleging Liability of whatever kind or nature (including Liability or responsibility for the costs of enforcement proceedings, investigations, cleanup, governmental response, removal or remediation, natural resources damages, property damages, personal injuries, medical monitoring, penalties, contribution, indemnification and injunctive relief) arising out of, based on or resulting from: (a) the presence, Release of, or exposure to, any Hazardous Materials; or (b) any actual or alleged non-compliance with any Environmental Law or term or condition of any Environmental Permit.
“Environmental Law” means any applicable Law, and any Governmental Order or binding agreement with any Governmental Authority: (a) relating to pollution (or the cleanup thereof) or the protection of natural resources, endangered or threatened species, human health or safety, or the environment (including ambient air, soil, surface water or groundwater, or subsurface strata); or (b) concerning the presence of, exposure to, or the management, manufacture, use, containment, storage, recycling, reclamation, reuse, treatment, generation, discharge, transportation, processing, production, disposal or remediation of any Hazardous Materials.
“Environmental Notice” means any written directive, notice of violation or infraction, or notice respecting any Environmental Claim relating to actual or alleged non-compliance with any Environmental Law or any term or condition of any Environmental Permit.
“Environmental Permit” means any Permit, letter, clearance, consent, waiver, closure, exemption, decision or other action required under or issues, granted, given, authorized by or made pursuant to Environmental Law.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“ERISA Affiliate” means each entity that is treated as a single employer with the Company for purposes of Code § 414.
“Excluded Liability” means any Liability of the Company arising from any business, operation, activity, property or other asset conducted or owned prior to the Closing.
“Governmental Authority” means any federal, state, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction.
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“Governmental Order” means any order, court opinion, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.
“Hazardous Materials” means: (a) any material, substance, chemical, waste, product, derivative, compound, mixture, solid, liquid, mineral or gas, in each case, whether naturally occurring or manmade, that is hazardous, acutely hazardous, toxic, or words of similar import or regulatory effect under Environmental Laws; and (b) any petroleum or petroleum-derived products, radon, radioactive materials or wastes, asbestos in any form, lead or lead-containing materials, urea formaldehyde foam insulation, per- and polyfluoroalkyls, and polychlorinated biphenyls.
“Indebtedness” of any Person means, without duplication, (i) the principal and accrued and unpaid interest, prepayment and redemption premiums or penalties (if any), unpaid fees or expenses and other monetary obligations in respect of (A) indebtedness of such Person for money borrowed and (B) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of which such Person is responsible or liable; (ii) all obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations of such Person and all obligations of such Person under any title retention agreement; (iii) all obligations of such Person under leases required to be capitalized in accordance with historical practices; (iv) all obligations of such Person for the reimbursement of any obligor on any letter of credit, banker’s acceptance or similar credit transaction; (v) all obligations of such Person under interest rate or currency swap transactions (valued at the termination value thereof); (vi) all obligations of the type referred to in clauses (i) through (v) of any Persons for the payment of which such Person is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise, including guarantees of such obligations; and (vii) all obligations of the type referred to in clauses (i) through (vi) of other Persons secured by (or for which the holder of such obligations has an existing right, contingent or otherwise, to be secured by) any Encumbrance on any property or asset of such Person (whether or not such obligation is assumed by such Person).
“Indemnified Taxes” means (a) all Taxes of the Seller; (b) all Taxes of Company, or relating to the Business of the Company, for all Pre-Closing Tax Periods; (c) all Taxes of any member of an affiliated, consolidated, combined or unitary group of which the Company (or any predecessor of the Company) is or was a member on or prior to the Closing Date by reason of a liability under Treasury Regulation Section 1.1502-6 or any comparable provisions of foreign, state or local Law; (d) any and all Taxes of any Person imposed on the Company arising under the principles of transferee or successor liability or by contract, relating to an event or transaction occurring before the Closing Date; (e) any withholding Taxes imposed in connection with the transaction contemplated by this Agreement (f) any Transfer Taxes; and (g) any Losses resulting from an increase in post-Closing Tax Liability or decrease in Tax attribute resulting from a challenge or disallowance of the allocation of the Purchase Price between the Membership Interests purchased pursuant to this Agreement and the real estate purchased pursuant to the Real Estate Purchase Agreement.
“Intellectual Property” means (i) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all patents and patent applications, together with all reissuances, continuations, continuations-in-part, revisions,
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extensions, and reexaminations thereof, (ii) all trademarks, service marks, trade dress, logos, trade names, domain names, social media handles or accounts, and corporate names, together with all translations, adaptations, derivations, and combinations thereof and including all goodwill associated therewith, and all applications, registrations and renewals in connection therewith, (iii) all copyrights, and all applications, registrations, and renewals in connection therewith, (iv) all trade secrets and confidential business information (including ideas, research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, designs, drawings, specifications, technical data, customer and supplier lists, pricing and cost information, and business and marketing plans and proposals), (v) all computer software, (vi) all database rights, (vii) all design rights and registered designs and all documentation and media constituting or describing any of the foregoing and all copies and tangible embodiments thereof (in whatever form or medium and whether or not any of the foregoing is registered), and (viii) all other proprietary rights, including all moral rights, pertaining to any product or service designed, manufactured, sold, distributed, marketed, used, performed, employed or exploited, and all rights or forms of protection of a similar nature or having equivalent or similar effect to any of those which may subsist anywhere in the world, owned by or registered in the name of any Person or in which any Person has any rights, licenses or immunities.
“Knowledge of Seller” or “Seller’s Knowledge” or any other similar knowledge qualification, means the knowledge of any director or officer of Seller, after reasonable and due inquiry.
“Law” means any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree, other requirement or rule of law of any Governmental Authority.
“Liability” means the amount of any actual liability or obligation of whatever kind or nature (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due), including any liability for Taxes.
“Losses” means losses, damages, Taxes, Liabilities, deficiencies, judgments, interest, awards, penalties, fines, costs or expenses of whatever kind, including reasonable attorneys’ fees and the cost of enforcing any right to indemnification hereunder or under any other Transaction Document and the cost of pursuing any insurance providers.
“Makerstar” means Makerstar Capital, Inc., a Delaware corporation.
“Material Adverse Effect” means any effect, change, event, or circumstance that, individually or together with any other effects, changes events, or circumstances, has or would reasonably be expected to have a material adverse impact on the Company or its assets, operations, or condition of its business in any manner.
“Membership Interests” has the meaning set forth in the Recitals.
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“Ordinary Course of Business” means consistent with the past, lawful practice of the Business by the Company and, in any event, in a manner no less than as necessary to ensure compliance with Law in all material respects.
“Organizational Document” means, relative to any Person that is not an individual, its certificate of incorporation, its certificate of formation, its certificate of partnership, its by-laws, its partnership agreement, its limited liability company agreement, its memorandum or articles of association, share designations or similar organization documents and all shareholder agreements, voting trusts and similar arrangements applicable to any of its authorized equity securities, as applicable.
“Permits” means all permits, licenses, franchises, approvals, authorizations, registrations, certificates, variances and similar rights obtained, or required to be obtained, from Governmental Authorities.
“Person” means an individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association or other entity.
“Pre-Closing Tax Period” means any taxable period ending on or before the Closing Date and, with respect to any taxable period beginning before and ending after the Closing Date, the portion of such taxable period ending on and including the Closing Date.
“Real Estate Purchase Agreement” means that certain Purchase and Sale Agreement, dated as of [_], 2024, by and between Makerstar and Buyer.
“Release” means any actual or threatened release, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, abandonment, disposing or allowing to escape or migrate into or through the environment (including, without limitation, ambient air (indoor or outdoor), surface water, groundwater, land surface or subsurface strata or within any building, structure, facility or fixture).
“Representative” means, with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person.
“Tax Return” means any return, declaration, report, claim for refund, information return or statement or other document relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.
“Taxes” means (a) all U.S. federal, state, local, or foreign. income, franchise, profits or gross receipts, ad valorem, value added, capital gains, sales, goods and services, use, real or personal property, unclaimed or abandoned property liability or obligation (whether delineated as a tax), escheat liability or obligation (whether delineated as a tax), capital stock, capital, alternative minimum, license, registration, branch, payroll, estimated, withholding, employment, excise, severance, privilege, stamp, occupation, premium, windfall profits, environmental, social security (or similar), unemployment compensation, disability, transfer, gains and any other taxes (and any levies, fees, imposts, duties, governmental charges, assessments, obligations or tariffs in the nature of a tax) of any kind whatsoever, together with any interest, fines, assessments,
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penalties or additions to tax imposed in connection therewith or with respect thereto; and any interest in respect of such additions or penalties and (b) any liability for the payment of any items described in clause (a) above as a result of being (or ceasing to be) a member of an affiliated, consolidated, combined, unitary, or other group for Tax purposes (or being included (or being required to be included) in any Tax Return related to such group), as a transferee or successor, by Contract, pursuant to any Law or otherwise.
“Third Party Consents” means those consents listed on Section 4.5 of the Disclosure Schedules.
“Transaction Documents” means this Agreement, the Real Estate Purchase Agreement, the Assignment and the Officer’s Certificate.
“Transaction Fees” means, without duplication, the following unpaid fees, expenses and other similar amounts that have been or are expected to be incurred on or prior to the Closing Date on behalf of the Seller or Buyer: (i) the fees and disbursements of, or other similar amounts charged by, counsel to the Seller or Buyer, as applicable; (ii) the reasonable fees and expenses of, or other similar amounts charged by, any accountants, agents, financial advisors, consultants and experts employed by the Seller or the Buyer, as applicable; and (iii) all other costs or other expenses incurred by the Seller or Buyer, as applicable, in connection with or as a result of the transactions contemplated by this Agreement.
“Treasury Regulations” means the regulations promulgated under the Code, as amended and in effect from time to time.
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Except as set forth in the correspondingly numbered Section of the Disclosure Schedules, Seller represents and warrants to Buyer as follows:
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Buyer represents and warrants to Seller as follows:
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For the sole purpose of determining Losses (and not for determining whether or not any breaches of representations or warranties have occurred), the representation or warranty shall be determined without regard to any materiality, material adverse effect or other similar qualification contained in or otherwise applicable to such representation or warranty.
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If to Buyer:
C/O CleanSpark Inc.
10624 S Eastern Ave, Ste A-638
Henderson, NV 89052
Attn: Leighton Koehler, General Counsel
Email: lkoehler@cleanspark.com
With a copy to (which shall not constitute notice):
Cozen O’Connor
1650 Market Street, Suite 2800
Philadelphia, Pennsylvania 19103
Attn: Joseph C. Bedwick
Email: jbedwick@cozen.com
If to Seller:
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MakerStar Capital Inc.
4 Park Plaza, Ste 1230
Irvine, CA 92614
Attention: Alex Wang
Email: [redacted]
With a copy to:
MakerStar Capital Inc.
4 Park Plaza, Ste 1230
Irvine, CA 92614
Attention: Dustin Thomas
Email:dustin@makerstarcapital.com
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[Signatures contained on following page.]
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the date first written above.
BUYER: SELLER:
CSRE Properties Mississippi, LLC [_]
By: By: ________________________________
Name: Name:
Title: Title:
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CleanSpark Announces Two New Acquisitions, Securing Power and Infrastructure to Reach 20 EH/s
Company ventures into Mississippi with acquisition of three turnkey operations that are expected to generate operating hashrate of 2.4 EH/s
Expands in Dalton, GA, with acquisition of third site and expansion of existing Dalton facilities to bring total expected hashrate there to 2.4 EH/s
LAS VEGAS, February 6, 2024 -- CleanSpark Inc. (Nasdaq: CLSK), America's Bitcoin Miner, today announced it has entered into definitive agreements to acquire three turnkey bitcoin mining facilities in Mississippi for a cash payment of $19.8 million. The purchase is expected to close within 21 days, with the operating hashrate at the combined facilities expected to reach 2.4 EH/s (exahashes per second) shortly after closing.
Concurrently, the Company has entered into definitive agreements to acquire a third mining facility which is under construction in Dalton, GA, for an initial cash payment of $3.4 million. The Company expects to invest another $3.5 million to complete the project, with a target operational date of April 2024. The facility is expected to operate at 0.8 EH/s.
CleanSpark already operates approximately 0.8 EH/s of machines at its current campus in Dalton, comprised of two facilities. Additionally, the Company is now expanding its existing Dalton campus with an extra 0.8 EH/s expected, for a total operating hashrate of 2.4 EH/s once all facilities in Dalton are running at full capacity.
The two announced deals, combined with the imminent energization of the Sandersville expansion, provide CleanSpark the additional power it needs to exceed 20 EH/s during the first half of 2024, which is double the Company’s current operational hashrate of 10 EH/s. The Company expects to pay for the acquisitions with cash on hand.
“I’m pleased to announce our expansion into nearby Mississippi and for our newest acquisition in Dalton, which will not only strengthen our ties in this vibrant community but also improve our operating efficiencies as we prepare for the halving,” said Zach Bradford, CEO. “Given our existing footprint in Dalton, we expect to nearly triple our hashrate there with minimal increases to our overhead operating costs.”
Bradford continued, “With the addition of Mississippi to our portfolio, we are gradually increasing our geographic diversity and expect to apply our proven track record of success in this new and exciting operating environment. As one of the few public miners to achieve scale, we expect to continue to be among the most efficient operators, both in terms of the wise stewardship of our energy portfolio and in our ability to maintain best-in-class overhead costs.”
The news of these recent acquisitions comes on the heels of CleanSpark’s announcement in January of its strategic agreement to purchase up to 160,000 S21 miners, providing a path to 50 EH/s.
Expected and Existing Hashrate by Location
|
Announced Acquisition |
Planned Expansion |
Existing Hashrate |
Total* |
Dalton (existing) |
0.8 EH/s |
0.8 EH/s |
0.8 EH/s |
2.4 EH/s |
Mississippi |
2.4 EH/s |
- |
- |
2.4 EH/s |
Sandersville |
- |
6.0 EH/s |
2.4 EH/s |
8.4 EH/s |
Washington |
- |
- |
3.2 EH/s |
3.2 EH/s |
Norcross |
- |
- |
0.5 EH/s |
0.5 EH/s |
College Park |
- |
- |
1.5 EH/s |
1.5 EH/s |
Co-locations |
- |
- |
1.6 EH/s |
1.6 EH/s |
Total* |
3.2 EH/s |
6.8 EH/s |
10 EH/s |
20 EH/s |
*Total hashrate is based on best case estimates and includes a combination of ASIC models, including JPros, XPs, and S21s.
About CleanSpark
CleanSpark (Nasdaq: CLSK) is America's Bitcoin Miner. We own and operate data centers that primarily run on low-carbon power. Our infrastructure responsibly supports Bitcoin, the world's most important digital commodity and an essential tool for financial independence and inclusion. We cultivate trust and transparency among our employees and the communities we operate in. Visit our website at www.cleanspark.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In this press release, forward-looking statements include, but may not be limited to, statements regarding the Company's expectations, beliefs, plans, intentions, and strategies. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "targets," "projects," "contemplates," "believes," "estimates," "forecasts," "predicts," "potential" or "continue" or the negative of these terms or other similar expressions. The forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to: the closing of the acquisitions, the timing, performance, and costs of acquiring, putting into operation, and then operating the real estate and assets in Mississippi; the timing, performance, and costs of acquiring, putting into operation, and then operating the real estate and completion of construction of the building in Dalton; the timing, performance, and costs of expanding the Company’s existing Dalton facilities; the Company realizing the hashrate and efficiency discussed in this press release; the risk that the electrical power available to our facilities is reduced, curtailed, or does not increase as expected; the success of its digital currency mining activities; the volatile and unpredictable
cycles in the emerging and evolving industries in which we operate; increasing difficulty rates for bitcoin mining; bitcoin halving; new or additional governmental regulation; the anticipated delivery dates of new miners; the ability to successfully deploy new miners; the dependency on utility rate structures and government incentive programs; dependency on third-party power providers for expansion efforts; the expectations of future revenue growth may not be realized; and other risks described in the Company's prior press releases and in its filings with the Securities and Exchange Commission (SEC), including under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2023, and any subsequent filings with the SEC. Forward-looking statements contained herein are made only as to the date of this press release, and we assume no obligation to update or revise any forward-looking statements as a result of any new information, changed circumstances or future events or otherwise, except as required by applicable law.
Investor Relations Contact
Brittany Moore
702-989-7693
ir@cleanspark.com
Media Contact
Eleni Stylianou
702-989-7692
pr@cleanspark.com
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