Item 1.01. Entry into a Material Definitive Agreement.
On January 13, 2023 (the “Effective
Date”), Faraday Future Intelligent Electric Inc. (the “Company”), FF Top Holding LLC, a Delaware limited liability company
(“FF Top”), and solely for purposes of certain amendments to the Heads of Agreement (as defined below), FF Global Partners
LLC, a Delaware limited liability company (“FF Global”), entered into an Amended and Restated Shareholder Agreement (the “Amended
Shareholder Agreement”), which amended and restated that certain Shareholder Agreement, dated as of July 21, 2022, by and between
the Company and FF Top (the “Original Shareholder Agreement”), as amended by that certain Heads of Agreement (as amended,
supplemented or otherwise modified on or prior to the Effective Date, the “Heads of Agreement”), dated as of September 23,
2022, by and between the Company, FF Global and FF Top.
Board Designation Right
Pursuant to the Amended Shareholder Agreement,
FF Top has the right to nominate for election to the Company’s board of directors (the “Board”) four designees (the
“FF Top Designees”) until the first date on which FF Top has ceased to beneficially own at least 21,333,530 shares of the
Company’s common stock (the “Common Stock,” and such share amount the “Minimum Share Amount”) for at least
365 consecutive days. The Minimum Share Amount is subject to adjustment in connection with any stock split, reverse stock split or other
similar corporate action after the date of the Amended Shareholder Agreement. Under the Amended Shareholder Agreement, FF Top shall be
deemed to continue to hold the Minimum Share Amount if its beneficial ownership falls below the Minimum Share Amount as a result of a
transaction entered into by FF Top to facilitate a Company financing (a “Financing Facilitation Transaction”) until FF Top
disposes of further shares in a transaction (other than a Financing Facilitation Transaction), following which FF Top does not beneficially
own a number of shares of Common Stock at least equal to the Minimum Share Amount. Following the termination of FF Top’s right to
nominate four FF Top Designees, FF Top shall continue to have the right to nominate a number of FF Top Designees not less than the number
equal to the total number of directors on the Board, multiplied by the aggregate voting power of the shares of Common Stock and other
securities of the Company generally entitled to vote in the election of directors of the Company beneficially owned by FF Top and its
affiliates, divided by the total voting power of the then-outstanding shares of Common Stock issued as of the record date for any meeting
of shareholders of the Company at which directors are to be elected (the “Shareholder Share Percentage”), rounding up to the
next whole director. The Amended Shareholder Agreement also requires the Company to take all Necessary Action (as defined in the Amended
Shareholder Agreement) to cause to be appointed to any committee of the Board a number of FF Top Designees that corresponds to the proportion
that the number of directors FF Top has the right to designate to the Board bears to the total number of directors on the Board, to the
extent such FF Top Designees are permitted to serve on such committees under the applicable rules and regulations of the Securities and
Exchange Commission (the “SEC”) and applicable listing rules. The FF Top Designees are required to include two independent
directors for so long as FF Top is entitled to nominate four FF Top Designees, and the Company is at all times required to cause the Board
to include a sufficient number of independent directors who are not FF Top Designees to comply with applicable listing standards, unless
and until the Company becomes a “controlled company” under relevant listing exchange rules. Additionally, the size of the
Board may not be increased without FF Top’s prior written consent, which consent shall not be unreasonably withheld, conditioned
or delayed (with it being reasonable for FF Top to withhold its consent to any change in the size of the Board that would result in a
decrease in the proportion or percentage of the members of the Board who are FF Top Designees).
FF Top shall have the right to fill any vacancies
created on the Board at any time by the death, disability, retirement, removal, failure of being elected or resignation of any FF Top
Designee. Further, FF Top has the right at any time, and from time to time, to remove any FF Top Designee, and FF Top has the exclusive
right to nominate a replacement nominee to fill any vacancy so created by such removal or resignation of such FF Top Designee. The Company
shall use its reasonable best efforts to take or cause to be taken, to the fullest extent permitted by law, all “Necessary Action”
(as defined in the Amended Shareholder Agreement) to fill such vacancies or effect such removals in accordance with the Amended Shareholder
Agreement.
The appointment or nomination for election of FF
Top Designees (other than the FF Top Designees for the 2023 annual meeting of shareholders, the appointment of whom shall be governed
by the Heads of Agreement, as amended by the Amended Shareholder Agreement) will be subject to the reasonable verification and/or approval
by the Nominating and Corporate Governance Committee of the Board based on the criteria set forth in the Amended Shareholder Agreement
(collectively, the “Criteria”).
If any FF Top Designee fails to be elected at any
meeting of the Company’s shareholders, then, upon FF Top’s request in writing, the Company shall promptly expand the size
of the Board by a number of seats equal to the number of non-elected FF Top Designees, and FF Top shall have the exclusive right to fill
the vacancy or vacancies on the Board created by such expansion (provided the individual or individuals who shall fill such vacancy or
vacancies shall not be the same FF Top Designees who failed to get elected, without prejudice to FF Top’s right to re-designate
the non-elected FF Top Designees as FF Top Designees in any other circumstance), and such new FF Top Designees shall be appointed to the
Board by the Board promptly following their having been approved or deemed approved in accordance with the Criteria and procedures set
forth in the Amended Shareholder Agreement. Immediately prior to (and effective as of) the first meeting of shareholders following such
expansion of the Board, the Board shall cause the size of the Board to be decreased back to seven. This Board expansion right shall cease
to have any further force or effect at such time as the voting power of each share of the Company’s Class B Common Stock, by operation
of the Company’s certificate of incorporation (as amended from time to time, the “Charter”), shall be 20 votes per share.
Each FF Top Designee shall be entitled
to the same indemnification and other rights and privileges applicable to all other members of the Board generally or to which all such
members of the Board are entitled. Pursuant to the Amended Shareholder Agreement, the Company also acknowledges that, to the extent that
the FF Top Designees serving on the Board have rights to indemnification, advancement of expenses and/or insurance provided by FF Top
or one or more of their respective affiliates (collectively, the “Secondary Indemnitors”), the Company’s and its insurers’
obligations under any indemnification agreements entered into with FF Top Designees shall remain primary.
Agreement Not to Elect to Be a Controlled Company
Pursuant to the Amended Shareholder Agreement,
until the occurrence of a Qualifying Equity Market Capitalization (as defined in the Charter, but substituting “$3 billion”
in place of “$20 billion”), the Company agrees not to elect to be treated as a “controlled company” as defined
under the rules of the securities exchange on which the Company is listed.
Cooperation Regarding FF Top’s Pledges, Hypothecation or Grant
of Shares of the Company’s Common Stock
Pursuant to the Amended Shareholder Agreement,
the Company agrees to cooperate with any written requests by FF Top relating to any such pledge of any of the shares of Common Stock of
the Company owned by FF Top, or hypothecation or grant thereof, including delivery of letter agreements to lenders in form and substance
reasonably satisfactory to such lenders (which may include agreements by the Company in respect of the exercise of remedies by such lenders)
and, subject to applicable law (as defined in the Amended Shareholder Agreement), instructing the transfer agent to transfer any such
shares of Common Stock subject to the pledge, hypothecation or grant into the facilities of The Depository Trust Company without restricted
legends.
Charter Amendments
FF Top has informed the Company that FF Top expects
the following proposals will be submitted to the Company’s shareholders for approval. Upon FF Top’s written request (an “Amendment
Request”), the Company shall submit for approval by the Company’s shareholders, at each annual and special meeting of the
Company’s shareholders held during a reasonable number of years (which shall not be, in any event, fewer than seven years) following
the date of the Amendment Request, binding proposals to amend the Charter to incorporate each of the amendments described below (the “Charter
Amendments”), and to recommend in favor of such Charter Amendments at each such meeting and solicit proxies in favor of each such
Charter Amendment at each such meeting using a well-regarded proxy solicitation firm. Each Charter Amendment is required to be in such
form as FF Top, acting reasonably, shall approve:
| ● | Amend Section 4.5(a) of the Charter (and any other applicable provisions
thereof, if any) to provide that (i) the voting power of the Company’s Class B Common Stock shall be 10 votes per share with effect
immediately upon the Company’s shareholders’ approval of such amendment and (ii) the voting power of the Company’s Class
B Common Stock shall increase from 10 votes per share to 20 votes per share immediately following the Company achieving a Qualifying Equity
Market Capitalization (substituting $3 billion for $20 billion in the definition of “Qualifying Equity Market Capitalization”). |
| ● | Amend Section 6.1 of the Charter (and any other applicable provisions thereof,
if any) to provide that FF Top shall have the right to nominate, remove and/or replace FF Top Designees whom it is entitled to nominate
pursuant to the Amended Shareholder Agreement by written consent, with such conforming changes to the certificate of incorporation as
are required to give legal effect to the right to act by written consent under Delaware law. |
| ● | Further amend Section 6.1 of the Charter (and any other applicable provisions
thereof, if any) to provide that for so long as FF Top continues to hold at least 32,640,300 shares of Common Stock (as such number may
be adjusted due to any stock split, reverse stock split or other similar corporate action after January 13, 2023), the Company’s
shareholders shall be entitled to act by written consent by the signature of (a) the requisite number of shareholders required to pass
such proposal at a meeting at which all shareholders entitled to vote on such proposal are present together with (b) FF Top. |
| ● | Further amend the Charter to provide that none of the rights afforded to
FF Top in the Charter or in the Company’s Amended and Restated Bylaws (the “Bylaws”) shall be amended without (a) unanimous
approval of the Board and (b) the approval by (i) holders of two-thirds of all of the Company’s issued and outstanding shares of
Common Stock, voting together as a single class and (ii) holders of a majority of the Company’s issued and outstanding shares of
Class B Common Stock, voting together as a separate class. |
If, when FF Top first delivers an Amendment Request,
the Company’s next annual meeting is scheduled to be held more than 120 days after the date of such request (or the Company has
already mailed a definitive proxy statement with respect to the Company’s next annual meeting of shareholders), the Company shall
promptly call a special meeting of its shareholders to consider and vote upon the Charter Amendments, with the same recommendation and
solicitation obligations of the Board described above. Promptly upon receipt of an Amendment Request, the Company shall also, in cooperation
with FF Top, make such conforming changes to the Bylaws as may reasonably be requested by FF Top to make them consistent with the Charter
Amendments.
Consent Right Relating to Nasdaq Rule 5635(d) Issuances
Pursuant to the Amended Shareholder Agreement,
the Company has agreed not to enter into any transaction or series of related transactions that would require a shareholder vote under
Nasdaq Listing Rule 5635(d) (without giving effect to Section 5635(f) thereof) without FF Top’s prior written consent, which written
consent shall not be unreasonably withheld, conditioned or delayed. Such consent right expires upon the earlier of (a) the conversion
of the voting power of the Company’s Class B Common Stock from one vote per share to 10 votes per share and (b) the first date on
which FF Top has ceased to beneficially own a number of shares of Common Stock at least equal to the Minimum Share Amount.
Voting Agreement Restrictions and
Modification to the ATW Securities Purchase Agreement
Pursuant to the Amended Shareholder Agreement,
the Company has agreed that the investors under that certain Securities Purchase Agreement, dated as of August 14, 2022 (as amended
from time to time in accordance with the terms thereof) (the “SPA”), shall have, by operation of the Amended Shareholder Agreement
and irrespective of any provision of the SPA to the contrary, the right to enter into any voting agreement or grant a voting proxy, at
any time and on any terms, with or to FF Top with respect to any shares of Common Stock held by such investor, and that the Company shall
take any and all such further action as may be necessary or desirous to give full effect to the foregoing (including without limitation,
irrevocably waiving any rights that the Company may have to restrict the entry by any such persons into any such voting agreements or
voting proxies pursuant to the SPA or otherwise and, solely to the extent required, amending the SPA). Each party to the SPA is a third-party
beneficiary of, and may enforce, the foregoing provision under the Amended Shareholder Agreement; however, the Company and FF Top are
permitted, acting alone without the consent of any such third-party beneficiary, to amend such provision in writing.
Agreement to Vote in Favor of Increasing
the Company’s Authorized Shares
Pursuant to the
Amended Shareholder Agreement, FF Top has agreed to vote all shares of Common Stock that it beneficially owns in favor of an increase
in the Company’s authorized shares of Class A Common Stock from 815 million to 1.69 billion (as such number may be adjusted due
to any stock split, reverse stock split or other similar corporate action after January 13, 2023) at the next meeting of the Company’s
shareholders held to consider such proposal (as such meeting may be adjourned or postponed). FF Top has also agreed not to transfer, convert
or otherwise take any action that would result in the conversion of any shares of Class B Common Stock into Class A Common Stock of the
Company prior to the Company’s receipt of shareholder approval for an increase in the number of authorized shares of Class A Common
Stock in accordance with the foregoing.
Mutual Release
Pursuant to the Amended Shareholder Agreement,
FF Top released and waived any and all claims it or any other “FF Top Parties” (i.e., FF Top, FF Peak Holding LLC, a Delaware
limited liability company, Pacific Technology Holding LLC, a Delaware limited liability company, FF Global and each of their affiliates,
and their respective successors and assigns) may have had against the Company and the Company Parties (described below; such claims, the
“FF Top Claims”) relating to matters occurring at any time after September 23, 2022 but prior to the execution of the
Amended Shareholder Agreement (the “FF Top Release”). The FF Top Release does not (i) release any FF Top Claim or right that
existed on or prior to September 23, 2022 but was not released pursuant to that certain Mutual Release, dated as of September 23,
2022, by and among the Company, FF Top, FF Global Partners LLC and the other parties thereto (the “Prior Release”) or (ii)
release any claim or right under (or terminate) any agreement between one or more FF Top Parties on the one hand, and one or more Company
Parties on the other hand (including without limitation the Amended Shareholder Agreement, the Heads of Agreement and the Prior Release).
The Company also released and waived
any and all claims it or any other “Company Parties” (i.e., the Company and each of the Company’s controlled affiliates,
each individual currently serving as a director or on the management team of the Company or any of its controlled affiliates, and the
respective successors and assigns of any of the foregoing) may have against FF Top Parties relating to any matters occurring at any time
after September 23, 2022 but prior to the execution of the Amended Shareholder Agreement; provided that the Company Release does
not (i) release any claim or right that existed on or prior to September 23, 2022 but was not released pursuant to the Prior Release
or (ii) release any claim or right under (or terminate) any agreement between one or more FF Top Parties on the one hand, and one or more
Company Parties on the other hand (including without limitation the Amended Shareholder Agreement, Heads of Agreement and the Prior Release).
Amendment to Heads of Agreement
In the Amended Shareholder Agreement,
the Company, FF Global and FF Top also agreed that (i) the “Executive Chairperson Resignation Condition” and the “Implementation
Condition” (in each case as defined in the Heads of Agreement) have been satisfied and (ii) there are no Definitive Documents (as
such term is defined in the Heads of Agreement) beyond the Heads of Agreement and the Amended Shareholder Agreement. The Company, FF Global
and FF Top also agreed to certain other amendments to the Heads of Agreement in the Amended Shareholder Agreement, including (x) the deletion
of the statement in the Heads of Agreement that “there is no change to FFIE’s Class A/B share structure (including 10x Class
B voting rights upon $20 billion market capitalization)” and (y) amendments to the process for selecting the Board’s director
nominees at the Company’s next annual meeting to (A) reflect that the Company’s next annual meeting after the date of the
Heads of Agreement will be held in 2023 and not in 2022, (B) update the process for selecting the Board’s 2023 director nominees
to eliminate need for a recruiting firm and (C) reflect FF Top’s right under the Amended Shareholder Agreement to nominate four
FF Top Designees to the Board.
The above description of the Amended Shareholder
Agreement does not purport to be complete and is qualified in its entirety by the complete text of such agreement, which is filed as Exhibit
10.1 hereto, and incorporated herein by reference.