If the only securities being registered on this
Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box: ☐
If any of the securities being registered on this
Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered
only in connection with dividend or interest reinvestment plans, check the following box: ☒
If this Form is filed to register additional securities
for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed
pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. ☐
If this Form is a registration statement pursuant
to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant
to Rule 462(e) under the Securities Act, check the following box. ☐
If this Form is a post-effective amendment to a
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pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate by check mark whether the registrant is
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See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”
and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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
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Description of Warrants
Public Warrants and Private Warrants
As of June 19, 2023, FF has Public Warrants
outstanding to purchase an aggregate of 23,540,988 shares of Class A Common Stock and Private Warrants outstanding to purchase an aggregate
of 111,131 shares of Class A Common Stock. References in this “–Public Warrants and Private Warrants” subsection
to “Warrant” or “Warrants” refer only to the Public Warrants and Private Warrants. Each outstanding whole Warrant
represents the right to purchase one share of Class A Common Stock at a price of $11.50 per share, subject to adjustment as discussed
below, at any time commencing on the later of 30 days after the consummation of a business combination and 12 months from the closing
of the initial public offering.
No Warrants will be exercisable for cash unless
there is an effective and current registration statement covering the shares of Class A Common Stock issuable upon exercise of the Warrants
and a current prospectus relating to such shares of Class A Common Stock. Notwithstanding the foregoing, if a registration statement
covering the shares of Class A Common Stock issuable upon exercise of the Public Warrants is not effective within a specified period
following the consummation of the Business Combination, Warrant holders may, until such time as there is an effective registration statement
and during any period when FF shall have failed to maintain an effective registration statement, exercise Warrants on a cashless basis
pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption,
or another exemption, is not available, holders will not be able to exercise their Warrants on a cashless basis. In the event of such
cashless exercise, each holder would pay the exercise price by surrendering the Warrants for that number of shares of Class A Common
Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A Common Stock underlying the Warrants,
multiplied by the difference between the exercise price of the Warrants and the “fair market value” (defined below) by (y)
the fair market value. The “fair market value” for this purpose will mean the average reported last sale price of the shares
of Class A Common Stock for the five trading days ending on the trading day prior to the date of exercise. The Warrants will expire on
the fifth anniversary of completion of the Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
The Private Warrants, as well as any Warrants
underlying additional units issued to Property Solutions Acquisition Sponsor, LLC (the “PSAC Sponsor”) or PSAC’s officers,
directors or their affiliates in payment of working capital loans, are identical to the Warrants underlying the units offered in the
initial public offering except that such Warrants will be exercisable for cash or on a cashless basis, at the holder’s option,
and will not be redeemable by FF, in each case so long as they are still held by the PSAC Sponsor or its permitted transferees.
FF may call the Warrants for redemption (excluding
the Private Warrants and any Warrants underlying additional units issued to the PSAC Sponsor, PSAC’s officers, directors or their
affiliates in payment of working capital loans made to PSAC), in whole and not
in part, at a price of $0.01 per Warrant,
| ● | at
any time while the Warrants are exercisable; |
| ● | upon
not less than 30 days’ prior written notice of redemption to each Warrant holder; |
| ● | if,
and only if, the reported last sale price of the shares of Class A Common Stock equals or
exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations
and recapitalizations), for any 20 trading days within a 30 trading day period commencing
at any time after the Warrants become exercisable and ending on the third business day prior
to the notice of redemption to Warrant holders; and |
| ● | if,
and only if, there is a current registration statement in effect with respect to the shares
underlying such Warrants. |
The
right to exercise will be forfeited unless the Warrants are exercised prior to the date specified in the notice of redemption. On and
after the redemption date, a record holder of a Warrant will have no further rights except to receive the redemption price for
such holder’s Warrant upon surrender of such Warrant.
If FF calls the Warrants for redemption as
described above, its management will have the option to require all holders that wish to exercise Warrants to do so on a “cashless
basis.” In such event, each holder would pay the exercise price by surrendering the Warrants for that number of shares of Class
A Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A Common Stock underlying
the Warrants, multiplied by the difference between the exercise price of the Warrants and the “fair market value” (defined
below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the shares
of Class A Common Stock for the five trading days ending on the third trading day prior to the date on which the notice of redemption
is sent to the holders of Warrants.
The exercise price and number of shares of
Class A Common Stock issuable on exercise of the Warrants may be adjusted in certain circumstances including in the event of a share
dividend, extraordinary dividend or FF’s recapitalization, reorganization, merger or consolidation. However, the Warrants will
not be adjusted for issuances of shares of Class A Common Stock at a price below their respective exercise prices.
The Warrants may be exercised upon surrender
of the Warrant certificate on or prior to the expiration date at the offices of the Warrant agent, with the exercise form on the reverse
side of the Warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price, by certified
or official bank check payable to us, for the number of Warrants being exercised. The Warrant holders do not have the rights or privileges
of holders of shares of Class A Common Stock and any voting rights until they exercise their Warrants and receive shares of Class A Common
Stock. After the issuance of shares of Class A Common Stock upon exercise of the Warrants, each holder will be entitled to one vote for
each share held of record on all matters to be voted on by stockholders.
Warrant holders may elect to be subject to
a restriction on the exercise of their Warrants such that an electing Warrant holder would not be able to exercise their Warrants to
the extent that, after giving effect to such exercise, such holder would beneficially own in excess of 9.8% of the shares of Class A
Common Stock outstanding.
No fractional shares will be issued upon exercise
of the Warrants. If, upon exercise of the Warrants, a holder would be entitled to receive a fractional interest in a share, FF will,
upon exercise, round up to the nearest whole number of shares of Class A Common Stock to be issued to the Warrant holder.
NPA Warrants and Notes
From September 2020 through June 2021, in connection
with the issuance of certain Notes (defined below), the Company issued warrants to purchase up to 11,751,949 shares of Class A Common
Stock (the “ATW NPA Existing Warrants”) to FF Ventures SPV IX LLC, FF Venturas SPV X LLC, FF Aventuras SPV XI LLC and FF
Adventures SPV XVIII LLC (collectively, the “ATW Warrant Holders”), entities affiliated with ATW Partners, LLC, pursuant
to the terms of the NPA. Each ATW NPA Existing Warrant entitles the ATW Warrant Holder, at any time on or prior to 5:00 p.m. (New York
City time) the date that is seven years following the initial issuance date of such ATW NPA Existing Warrant, to purchase a certain number
of shares of Class A Common Stock at a price per share of $10.00, subject to adjustment. The ATW NPA Existing Warrant exercise price
is subject to customary anti-dilution adjustments upon (among other triggering events) the occurrence of a change of control transaction
and certain dilutive transactions, including subsequent equity sales, share dividends and splits occurring following the issuance of
the applicable ATW NPA Existing Warrant. The ATW Warrant Holders may also exercise the ATW NPA Existing Warrants on a cashless (or “net
exercise”) basis. Any adjustments to the ATW NPA Existing Warrant exercise price are capped such that the ATW New Warrant Holders
are not entitled to exercise the ATW NPA Existing Warrants to the extent such exercise would result in the ATW Warrant Holders holding
shares in excess of 4.99% of the fully diluted capitalization of the Company.
In August 2021, in connection with the issuance
of certain Notes (defined below), the Company issued warrants to purchase up to 5,191,704 shares of Class A Common Stock (the “ATW
NPA New Warrants”) to FF Ventures SPV IX LLC, FF Venturas SPV X LLC and FF Aventuras SPV XI LLC (collectively, the “ATW New
Warrant Holders”), entities affiliated with ATW Partners, LLC, pursuant to the terms of the NPA. Each ATW NPA New Warrant entitles
the ATW New Warrant Holder, at any time on or prior to 5:00 p.m. (New York City time) on June 9, 2028, to purchase a certain number of
shares of Class A Common Stock at a price per share of $10.00, subject to adjustment. The ATW NPA New Warrant exercise price is subject
to customary anti-dilution adjustments upon (among other triggering events) the occurrence of a change of control transaction and certain
dilutive transactions, including subsequent equity sales, share dividends and splits occurring following the issuance of the applicable
ATW NPA New Warrant. The ATW New Warrant Holders may also exercise the ATW NPA New Warrants on a cashless (or “net exercise”)
basis. Any adjustments to the ATW NPA New Warrant exercise price are capped such that the ATW New Warrant Holders are not entitled to
exercise the ATW NPA New Warrants to the extent such exercise would result in the ATW Warrant Holders holding shares in excess of 4.99%
of the fully diluted capitalization of the Company.
On June 9, 2021, pursuant to the NPA, the Company
issued a promissory note (the “ATW June 8% Note”) in favor of FF Adventures SPV XVIII LLC, a third party investment firm
affiliated with ATW Partners, LLC, for an aggregate principal amount of $20.0 million, receiving net proceeds of $18.4 million, inclusive
of an 8% original issue discount. Prior to the ATW NPA Notes Amendment described below, the promissory note matured on December 9, 2022,
subject to the right of FF Adventures SPV XVIII LLC to extend the maturity date to December 9, 2023. The promissory note bears interest
at 0% per annum through and including December 9, 2022. In the event that FF Adventures SPV XVIII LLC extends the maturity date, the
promissory note bears interest at 10% per annum from December 10, 2022 until December 9, 2023. At the election of the holder of the ATW
June 8% Note, the principal amount converts into that number of shares of Class A Common Stock equal to 130% of the outstanding principal
amount divided by the applicable conversion price. Pursuant to the NPA (as amended by the ATW NPA Notes Amendment described below), upon
purchasing the ATW June 8% Note, FF Adventures SPV XVIII LLC became entitled to purchase from the Company, at its option, at any time
prior to July 20, 2023, an additional promissory note (the “ATW Optional 8% Note”) for an aggregate principal amount of up
to $20.0 million with an original issue discount of 8%. At the election of the holder of the ATW 8% Optional Note, the principal amount
would be convertible into that number of shares of Class A Common Stock equal to 130% of the outstanding principal amount divided by
the applicable conversion price. In addition, pursuant to the NPA, if FF Adventures SPV XVIII LLC elected to purchase the ATW Optional
8% Note, it would be entitled to receive from the Company a warrant (the “ATW Optional 8% Warrant”) to purchase that number
of shares of Class A Common Stock of the Company equal to 37.5% of the principal amount of the ATW Optional 8% Note divided by the applicable
exercise price.
On June 9, 2021, pursuant to the NPA, the Company
issued a promissory note (the “ATW June 13% Note,” and together with the ATW June 8% Note, the “ATW June Notes”)
in favor of FF Adventures SPV XVIII LLC, a third party investment firm affiliated with ATW Partners, LLC, for an aggregate principal
amount of $20.0 million, receiving net proceeds of $17.4 million, inclusive of a 13% original issue discount. Prior to the ATW NPA Notes
Amendment described below, the promissory note matured on December 9, 2022, subject to the right of FF Adventures SPV XVIII LLC to extend
the maturity date to December 9, 2023. The promissory note bears interest at 0% per annum through and including December 9, 2022. In
the event that FF Adventures SPV XVIII LLC extends the maturity date, the promissory note bears interest at 10% per annum from December
10, 2022 until December 9, 2023. At the election of the holder of the ATW June 13% Note, the principal amount is convertible into that
number of shares of Class A Common Stock equal to 100% of the outstanding principal amount divided by the applicable conversion price.
Pursuant to the NPA (as amended by the ATW NPA Notes Amendment described below), upon purchasing the ATW June 13% Note, FF Adventures
SPV XVIII LLC became entitled to purchase from the Company, at its option, at any time prior to July 20, 2023, an additional promissory
note (the “ATW Optional 13% Note”, and together with the ATW 8% Optional Note, the “ATW Optional Notes”) for
an aggregate principal amount of up to $20.0 million with an original issue discount of 13%. At the election of holder of the ATW Optional
13% Note, the principal amount would be convertible into that number of shares of Class A Common Stock equal to 100% of the outstanding
principal amount divided by the applicable conversion price. In addition, pursuant to the NPA, if FF Adventures SPV XVIII LLC elected
to purchase the ATW Optional 13% Note, it would be entitled to receive from the Company a warrant (the “ATW Optional 13% Warrant,”
and together with the ATW Optional 8% Warrant, the “ATW Optional Warrants”) to purchase that number of shares of Class A
Common Stock of the Company equal to 37.5% of the principal amount of the ATW Optional 13% Note divided by the applicable exercise price.
On August 10, 2021, pursuant to the NPA, the
Company issued a promissory note in favor of FF Ventures SPV IX LLC, a third party investment firm affiliated with ATW Partners, LLC,
for an aggregate principal amount of $15.7 million. Prior to the ATW NPA Notes Amendment described below, the promissory note matured
on February 10, 2023 and bears interest at 0% per annum. At the election of the holder, the principal amount is convertible into that
number of shares of Class A Common Stock equal to 130% of the outstanding principal amount divided by the applicable conversion price.
On August 10, 2021, pursuant to the NPA, the
Company issued a promissory note in favor of FF Venturas SPV X LLC, a third party investment firm affiliated with ATW Partners, LLC,
for an aggregate principal amount of $11.3 million. Prior to the ATW NPA Notes Amendment described below, the promissory note matured
on February 10, 2023 and bears interest at 0% per annum. At the election of the holder, the principal amount is convertible into that
number of shares of Class A Common Stock equal to 130% of the outstanding principal amount divided by the applicable conversion price.
On August 10, 2021, pursuant to the NPA, the
Company issued a promissory note in favor of FF Aventuras SPV XI LLC, a third party investment firm affiliated with ATW Partners, LLC,
for an aggregate principal amount of $7.0 million. Prior to the ATW NPA Notes Amendment described below, the promissory note matured
on February 10, 2023 and bears interest at 0% per annum. At the election of the holder, the principal amount is convertible into that
number of shares of Class A Common Stock equal to 130% of the outstanding principal amount divided by the applicable conversion price.
The foregoing promissory notes issued under
the NPA to entities affiliated with ATW Partners, LLC are referred to collectively throughout this prospectus as the “ATW NPA Notes.”
On July 26, 2022, the Company entered into
an amendment to amend the terms of all the ATW NPA Notes (the “ATW NPA Notes Amendment”), extending the maturity of all such
Notes to October 31, 2026, except that the accrual of interest is not deferred and accrues on the ATW NPA Notes at 10% following February
10, 2023. The conversion price of each of the ATW NPA Notes was adjusted to equal the lesser of (x) $10.00, (y) 95% of the per share
daily VWAP of the Class A Common Stock during the 30 trading days immediately prior to the applicable conversion date, and (z) the lowest
effective price per share of Class A Common Stock (or equivalents) issued or issuable by the Company in any financing of debt or equity
after July 26, 2022, subject to possible adjustment as set forth therein (the “Set Price”). However, from July 26, 2022 to
December 30, 2022, the conversion price of each of the ATW NPA Notes is equal to the lesser of (i) the Set Price, and (ii) 92% of the
lowest of the VWAPs during the seven (7) trading days immediately prior to the applicable conversion date. The ATW NPA Notes Amendment
added a “forced conversion” feature to each of the ATW NPA Notes that allows the Company, on or after December 31, 2022,
to cause the conversion of all or part of, in the aggregate among all of the ATW NPA Notes, up to $35.0 million principal amount of the
ATW NPA Notes less any principal amount of the ATW NPA Notes voluntarily converted by the holder thereof after July 26, 2022, subject
to certain conditions as set forth in the ATW NPA Notes Amendment. The conversion price is subject to customary anti-dilution adjustments
upon (among other triggering events) the occurrence of a change of control transaction and certain dilutive transactions, including subsequent
equity issuances, share dividends and splits occurring following the issuance of the ATW NPA Notes.
On October 10, 2022, the Company entered into
an exchange agreement with FF Aventuras SPV XI LLC, FF Venturas SPV X LLC, FF Ventures SPV IX LLC and FF Adventures SPV XVIII LLC, entities
affiliated with ATW Partners, LLC and holders (the “Holders”) of the ATW NPA Notes, pursuant to which, on October 10, 2022,
the Holders exchanged $4,012,180 in aggregate principal amount of the outstanding ATW NPA Notes for 6,269,031 newly issued shares of
Class A Common Stock, reflecting a price per share of Class A Common Stock of $0.64.
On October 19, 2022, the Company and the Holders
entered into an exchange agreement, pursuant to which, on October 19, 2022, the Holders exchanged $2,687,109 in aggregate principal amount
of the outstanding ATW NPA Notes for 5,227,837 newly issued shares of the Class A Common Stock, reflecting a price per share of Class
A Common Stock of $0.514. Following the completion of such exchange, there were no outstanding ATW NPA Notes.
Secured SPA Warrants and Secured SPA Notes
On August 14, 2022, the Company entered into
the Secured SPA with FF Simplicity Ventures LLC (“FF Simplicity”), an affiliate of ATW Partners LLC, as administrative and
collateral agent, and certain purchasers including FF Simplicity and RAAJJ Trading LLC (“RAAJJ”) (collectively with additional
purchasers from time to time party thereto, the “Purchasers”), to issue and sell: (i) $27.0 million aggregate principal amount
of Secured SPA Notes; (ii) $10.0 million in aggregate principal amount of Secured SPA Notes on the 20th business day following the closing
of the initial $27.0 million funding, subject to certain closing conditions; and (iii) $15.0 million in aggregate principal amount of
Secured SPA Notes (collectively, the “Bridge Notes”) on or prior to October 11, 2022, subject to certain closing conditions.
Under the Secured SPA (as amended by the First Amendment, as described below), the Company was permitted to offer incremental Secured
SPA Notes in an aggregate principal amount of $243.0 million within 90 days after the first closing under the Secured SPA (the “Incremental
Notes”). The Bridge Notes and Incremental Notes are subject to an original issue discount of 10%, and are convertible into shares
of Class A Common Stock at various conversion prices between $0.2275 and $1.05 (amended to $0.8925 pursuant to the Eighth Amendment,
as described below) per share, plus an interest make-whole amount as set forth in the Secured SPA Notes, subject to customary adjustments,
including full ratchet anti-dilution price protection (provided that, pursuant to the Eighth Amendment, the effective conversion price
for any such interest make-whole amount payable in shares of Class A Common Stock must not be lower than $0.10, and, pursuant to the
Fourth Amendment, as described below, any such interest make-whole amount can only be paid in shares of Class A Common Stock if certain
price and volume requirements of Class A Common Stock are met). The shares of Class A Common Stock issuable upon conversion of the Bridge
Notes and Incremental Notes are not transferable for six months (amended to three months pursuant to the First Amendment) without the
prior written consent of the Company (which consent shall not be unreasonably withheld). On August 16, 2022, the Company received $27.0
million aggregate principal amount of the Bridge Notes.
The Secured SPA Notes are secured by the grant
of a first priority perfected lien upon substantially all of the personal and real property of the Company and its subsidiaries, as well
as guaranty by substantially all of the Company’s domestic subsidiaries. The Secured SPA Notes mature on October 27, 2028 or earlier
under certain conditions set forth in the Secured SPA. The Secured SPA Notes accrue interest at 10% per annum, provided that, subject
to certain conditions set forth in the Secured SPA, the Company may elect to pay such interest in shares of Class A Common Stock if the
Company also pays the Purchasers an additional cash interest payment equal to 5% per annum. Except in the case of a mandatory prepayment
pursuant to the Secured SPA, if any of the Secured SPA Notes are prepaid, repaid, reduced, refinanced, or replaced in whole or in part
prior to the October 27, 2028 maturity date, then the Company shall pay to the Purchaser a “Premium Percentage” in an amount
ranging from 0% to 10% of the principal amount of such Note(s) determined in accordance with a schedule set forth in the Secured SPA.
Pursuant to the Secured SPA, each Purchaser that then owns at least $25.0 million principal amount of Secured SPA Notes (when aggregated
with any affiliates of such Purchaser) shall have customary preemptive rights to participate in any future financing by the Company as
provided in the Secured SPA.
As a closing condition under the Secured SPA
for funding of each of the Bridge Notes, the Company is required to deliver to each of the Purchasers a warrant (a “Secured SPA
Warrant” and, together with the Unsecured SPA Warrants, “Warrants”) registered in the name of such Purchaser to purchase
up to a number of shares of Class A Common Stock equal to 33% of such shares issuable to such Purchaser upon conversion of the Secured
SPA Note, with an exercise price equal to $5.00 per share, subject to customary full ratchet anti-dilution price protection and other
adjustments, and are exercisable for seven years on a cash or cashless basis. The Company may repurchase the Secured SPA Warrants for
$0.01 per Secured SPA Warrant share if and to the extent the VWAP of the Class A Common Stock during 20 of out 30 trading days prior
to the repurchase is greater than $15.00 per share, subject to certain additional conditions.
In addition, under the Secured SPA, the funding
of each of the Bridge Notes is subject to the satisfaction of the following closing conditions: (a) the Company shall have duly honored
all conversions and redemptions scheduled to occur or occurring by virtue of one or more Notices of Conversion of the Purchaser pursuant
to the Secured SPA Notes, if any, (b) the Company shall have paid all liquidated damages and other amounts owing to a Purchaser in respect
of the transaction documents pursuant to the Secured SPA, (c) the Company shall have satisfied the current public information requirements
under Rule 144 under the Securities Act on the applicable closing date, or on the applicable closing date there is an
effective registration statement pursuant to which the holder is permitted to utilize the prospectus thereunder to resell all of the
shares of Class A Common Stock issuable pursuant to the Secured SPA, (d) the Company’s shares of Common Stock are trading on a
trading market and all of the shares issuable pursuant to the transaction documents under the Secured SPA are listed or quoted for trading
on such trading market, and the Company believes such trading will continue uninterrupted for the foreseeable future, (e) there is a
sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock for the issuance of all of the shares then
issuable pursuant to the transaction documents under the Secured SPA, (f) there is no existing event of default as defined in the Secured
SPA and no existing event which, with the passage of time or the giving of notice, would constitute such an event of default, and (g)
the applicable Purchaser is not in possession of any information provided by the Company, or any of its subsidiaries, or any of their
officers, directors, employees, agents or affiliates, that constitutes, or may constitute, material non-public information. Each Purchaser
has the option, from time to time for 12 months after the effective date of the abovementioned registration statement, to purchase additional
senior secured convertible notes and Secured SPA Warrants of the Company on the same terms as the Incremental Notes in an aggregate amount
not to exceed the initial principal amount of the Bridge Notes and Incremental Notes issued to such Purchaser (the “Tranche B Notes”),
subject to certain conditions.
Pursuant to the Secured SPA, the Company agreed
to use commercially reasonable efforts to hold a special meeting of stockholders to obtain stockholder approval, as is required by the
Nasdaq listing rules, with respect to the issuance of any shares of Class A Common Stock in excess of 19.99% of the issued and outstanding
shares of the Class A Common Stock upon conversion of the Secured SPA Notes and exercise of the Secured SPA Warrants being issued to
the Purchasers pursuant to the Secured SPA. At a special meeting of the Company’s stockholders held on November 3, 2022, the Company’s
stockholders approved such issuance under the Nasdaq listing rules.
On September 23, 2022, the Secured SPA was
amended pursuant to Amendment No. 1 to Securities Purchase Agreement and Convertible Senior Secured Promissory Notes (the “First
Amendment”), pursuant to which the Purchasers agreed to accelerate $15.0 million of their funding obligations, with $7.5 million
aggregate principal amount of such notes being funded and issued on September 23, 2022, and the remaining $7.5 million aggregate principal
amount being funded and issued on October 11, 2022. The Purchasers also agreed under the First Amendment to purchase an additional $5.0
million in aggregate principal amount of Secured SPA Notes upon the filing by the Company of an amendment to the Company’s registration
statement on Form S-1 (File No. 333-268972), subject to certain closing conditions; however, the commitment to purchase such Secured
SPA Notes automatically terminated on October 27, 2022, upon the funding of an initial $10.0 million tranche of Secured SPA Notes to
Senyun, pursuant to the Joinder, as described below.
As a closing condition under the First Amendment
for funding of the accelerated funding obligations, the Company is required to deliver to each of the Purchasers a Secured SPA Warrant
on the same terms as the Secured SPA Warrants delivered in connection with the funding of Bridge Notes. On September 23, 2022, the Company
issued a Secured SPA Warrant to the Purchaser exercisable for 920,074 shares of Class A Common Stock, concurrent with the funding of
the $7.5 million accelerated funding commitment, and on October 11, 2022, the Company issued a Secured SPA Warrant to the Purchaser exercisable
for 2,357,142 shares of Class A Common Stock, concurrent with the funding of the $7.5 million accelerated funding commitment.
Additionally, the First Amendment removed the
6-month lock-up period that otherwise applied to a certain convertible note previously issued to FF Simplicity, reduced the conversion
price of such note to $1.05, reduced the lock-up period that otherwise applied to a certain other convertible note previously issued
to FF Simplicity from 6 months to 3 months and similarly reduced the lock-up period that otherwise applied to the Secured SPA Notes issued
pursuant to the accelerated funding, and other Incremental Notes, from 6 months to 3 months.
As additional consideration for FF Simplicity
entering into the First Amendment in the capacity of administrative and collateral agent, the Company issued to FF Simplicity a warrant
to purchase 10 shares of Class A Common Stock (the “Adjustment Warrant”). The terms of the Adjustment Warrants are the same
as the Secured SPA Warrants described above, except that the Adjustment Warrant (i) has an exercise price equal to $0.50 per share and
(ii) does not have the optional repurchase provision described above if stock trades above $15.00 per share. The full ratchet anti-dilution
price protection provision in the Secured SPA Warrants held as of the date of the First Amendment by FF Simplicity and RAAJJ Trading
LLC was waived in connection with the Adjustment Warrant.
On September 25, 2022, the Company entered
into a Joinder and Amendment Agreement (the “Joinder”) to the Secured SPA, with FF Simplicity as administrative and collateral
agent and purchaser, Senyun as purchaser and RAAJJ as purchaser, pursuant to which Senyun agreed to purchase Incremental Notes under
the Secured SPA in an aggregate principal amount of up to $60.0 million in certain installments. Pursuant to the Joinder, Senyun has
all of the same rights and obligations as a Purchaser under the Secured SPA and all documents, instruments and agreements contemplated
therein or thereby. In addition to Senyun’s commitment as set forth in the Joinder, the Joinder effectuated certain other amendments
to the Secured SPA, including, among other things, permitting the Secured SPA Notes to be funded in accordance with the Joinder.
On October 24, 2022, the Company entered into
a Limited Consent and Third Amendment (the “Third Amendment”) to the Secured SPA, with FF Simplicity as administrative and
collateral agent and purchaser, Senyun as purchaser and RAAJJ as purchaser, pursuant to which the maturity date for the Secured SPA Notes
was extended from August 14, 2026 to October 27, 2028 (i.e., the sixth anniversary of the first funding date of Senyun’s purchase
of Secured SPA Notes (the “First Senyun Funding Date”)) or such earlier date that the Secured SPA Notes become due and payable
pursuant to the Secured SPA (the “Maturity Date Extension”). As a result of the Maturity Date Extension, the total number
of shares of Class A Common Stock issuable under the Secured SPA was increased as compared to such number of shares issuable under the
Secured SPA prior to the Third Amendment. The Maturity Date Extension increases the interest make-whole amount as set forth in the Secured
SPA and the Secured SPA Notes payable upon conversion of the Secured SPA Notes, as the interest make-whole amount includes all interest
that would otherwise accrue on the Secured SPA Notes if such Secured SPA Notes were held until the October 27, 2028 maturity date.
As revised under the Third Amendment, Senyun
has agreed to acquire Secured SPA Notes from the Company according to the following schedule: (a) $10.0 million in principal amount of
Secured SPA Notes on the First Senyun Funding Date; (b) $10.0 million in principal amount of Secured SPA Notes on a date that is no later
than the later of (x) 14 business days after the First Senyun Funding Date and (y) the receipt of approval of the Company’s stockholders
under the applicable rules and regulations of Nasdaq of the issuance of all of the shares of Class A Common Stock underlying the Secured
SPA Notes and Secured SPA Warrants then issued and issuable to Senyun under the Secured SPA in excess of 19.99% of the issued and outstanding
shares of Common Stock (the “Senyun Stockholder Approval”) (which approval was obtained at the special meeting of stockholders
held on November 3, 2022); (c) $10.0 million in principal amount of Secured SPA Notes on a date that is no later than 15 business days
after the later of (x) the effective date of the Company’s registration statement on Form S-1 (File No. 333-268972) (which registration
statement was declared effective by the SEC on February 8, 2023) and (y) receipt of the Senyun Stockholder Approval; (d) $10.0 million
in principal amount of Secured SPA Notes within 30 business days after the later of (x) the effective date of the above noted Form S-1,
which was declared effective by the SEC on February 8, 2023, and (y) receipt of the Senyun Stockholder Approval; and (e) $20.0 million
in principal amount of Secured SPA Notes on a date that is no later than 10 business days after the latest of (x) official delivery of
the Company’s FF 91 vehicle to the first batch of bona fide customers, (y) the effective date of the above noted Form S-1, which
was declared effective by the SEC on February 8, 2023, and (z) receipt of the Senyun Stockholder Approval.
In addition, pursuant to the Third Amendment,
each Purchaser and FF Simplicity as administrative and collateral agent waived certain defaults and events of default, any breaches of
representations or warranties, any breaches of covenants and any other effects, under the Secured SPA and related documents arising from
(i) any amounts owed as of the First Senyun Funding Date by the Company or its subsidiaries to their respective trade counterparties,
suppliers, vendors or, in each case, other similar counterparties, that remain unpaid after the First Senyun Funding Date, (ii) any reduction
in the workforce of the Company or its subsidiaries or any additional reduction in such workforce that occurs after September 23, 2022,
and/or (iii) any reasonably foreseeable consequence in respect of any of the foregoing clauses (i) or (ii).
On November 8, 2022, the Company entered into
a Limited Consent and Amendment (“Fourth Amendment”), to the Secured SPA with FF Simplicity as administrative and collateral
agent and purchaser, Senyun as purchaser and RAAJJ as purchaser, pursuant to which the parties agreed that (i) in no event will the effective
conversion price of any interest or interest make-whole amount payable in shares of Class A Common Stock in respect of Secured SPA Notes
issued or issuable under the Secured SPA be lower than $0.21 per share of Class A Common Stock (further amended to $0.10 pursuant to
the Eighth Amendment), and (ii) in order for the Company to make payment of any interest or interest make-whole amount in shares of Class
A Common Stock, certain price and volume requirements must be met, namely that (x) the VWAP of the Class A Common Stock is not less than
$0.21 per share on any trading day during the preceding seven trading day period, and (y) the total volume of the Class A Common Stock
does not drop below $1.5 million on any trading day during the same period (in each case, as adjusted for any stock splits, stock dividends,
stock combinations, recapitalizations or other similar transactions). On different dates in December 2022, Senyun funded aggregated amounts
of $10.0 million in gross proceeds pursuant to the Joinder. The Company received $9.0 million from such funding, net of original issue
discount and transaction costs.
On December 28, 2022, the Company entered into
a Letter Agreement and Amendment (the “Senyun Amendment”) to the Secured SPA with Senyun as purchaser, pursuant to which
Senyun paid to the Company the first $4.0 million of its funding commitment under the Secured SPA on January 3, 2023, as well as $2.0
million on January 6, 2023 and $4.0 million on January 18, 2023. In addition to an amount of $60.0 million already committed by Senyun
as part of the Joinder, pursuant to the Senyun Amendment, the Company has agreed to issue and sell to Senyun, subject to the satisfaction
of certain conditions (which include agreement by the Company and Senyun on the terms and conditions of the investment), Incremental
Notes in an aggregate principal amount of $30.0 million: (i) $10.0 million in principal amount of additional Secured SPA Notes no later
than January 31, 2023; (ii) $10.0 million in principal amount of additional Secured SPA Notes no later than February 28, 2023; and (iii)
$10.0 million in principal amount of additional Secured SPA Notes no later than March 15, 2023. Pursuant to the Senyun Amendment, the
Company has also approved the issuance to Senyun of such number of shares of Class A Common Stock equal to the difference between (x)
the actual number of shares of Class A Common Stock previously issued to Senyun upon conversion of $19.0 million in principal amount
of Secured SPA Notes and (y) the number of such shares of Class A Common Stock that would have been issued to Senyun had the conversion
price applicable to such Secured SPA Notes been $0.8925, taking into account any beneficial ownership limitation applicable to Senyun.
On January 25, 2023, the Company entered into
a Limited Consent and Amendment No. 5 (the “Fifth Amendment”) to the Secured SPA with Senyun as purchaser, pursuant to which
Senyun agreed to purchase $10.0 million in principal amount of additional Secured SPA Notes no later than January 27, 2023, which $10.0
million amount was funded on January 26, 2023. Pursuant to the Fifth Amendment, the Company also agreed (a) to use commercially reasonable
efforts to file an amendment to the registration statement on Form S-1 (File No. 333-268972) no later than January 29, 2023 and to seek
effectiveness of such registration statement on or prior to February 10, 2023 (which registration statement was declared effective by
the SEC on February 8, 2023); (b) to use commercially reasonable efforts to file an additional registration statement on Form S-1 registering
the re-sale by Senyun of all remaining shares of Class A Common Stock underlying Senyun’s Secured SPA Notes and Secured SPA Warrants
no later than February 10, 2023 (which registration statement on Form S-1 (File No. 333-269729) was filed with the SEC on February 13,
2023) and to seek effectiveness of such registration statement as promptly as practicable thereafter (which registration statement was
declared effective by the SEC on March 22, 2023); (c) to honor the conversion notice submitted by Senyun on January 18, 2023, and to
reserve sufficient shares of Class A Common Stock to satisfy the conversion and exercise of all of Senyun’s then outstanding Secured
SPA Notes and Secured SPA Warrants to the extent the Company has sufficient authorized but unissued or uncommitted shares of Class A
Common Stock. Additionally, pursuant to the Fifth Amendment, the Company and Senyun agreed to use commercially reasonable efforts to
enter into definitive documentation as promptly as practicable after the date of the Fifth Amendment, in connection with restructuring
of the Secured SPA Notes and Secured SPA Warrants and an additional investment as set forth on the term sheets attached to the Fifth
Amendment, which definitive documentation was executed in connection with the Sixth Amendment (as described below).
On February 3, 2023, the Company entered into
an Amendment No. 6 to Securities Purchase Agreement (the “Sixth Amendment”) with FF Simplicity as administrative and collateral
agent and purchaser, Senyun as purchaser, FF Prosperity Ventures LLC (“FF Prosperity”) as purchaser and Acuitas Capital,
LLC as purchaser, pursuant to which the Purchasers agreed to purchase up to $135.0 million (including $10.0 million previously funded
by Senyun as an advanced payment) in aggregate principal amount of Secured SPA Notes (the “Tranche C Notes”) in accordance
with the schedule set forth in the Secured SPA as follows, subject to certain conditions: (i) for Senyun, (A) no later than three business
days after the effective date of the Sixth Amendment, the purchase and issuance of $25.0 million in principal amount of Tranche C Notes
(which principal amount shall be reduced on a dollar-for-dollar basis by the $10.0 million previously funded by Senyun as an advanced
payment) shall take place, pursuant to which, on February 9, 2023 and February 10, 2023, the Company received aggregate gross proceeds
of $15.0 million; (B) no later than 10 business days after the effective date of the Sixth Amendment, the purchase and issuance of $25.0
million in principal amount of Tranche C Notes shall take place, pursuant to which, on February 23, 2023, March 3, 2023, March 9, 2023
and March 10, 2023, the Company received aggregate gross proceeds of $25.0 million; and (C) no later than five business days after receipt
of (a) approval by the Company’s stockholders of an increase in number of authorized shares of Class A Common Stock to 1,690,000,000
(which approval was obtained at the special meeting of stockholders held on February 28, 2023) and filing of an amendment to the Amended
and Restated Charter to reflect such increase in authorized shares (which amendment was filed with the Secretary of State of the State
of Delaware on March 1, 2023) (the “Sixth Amendment Authorized Share Increase”), (b) approval by the Company’s stockholders
as may be required by applicable Nasdaq rules with respect to transactions contemplated under the Sixth Amendment (which approval was
obtained at the special meeting of stockholders held on March 30, 2023) (the “Sixth Amendment Stockholder Approval”), and
(c) effectiveness of the registration statement on Form S-1 (File No. 333-269729) registering the shares issuable under the Sixth Amendment
(which registration statement was declared effective by the SEC on March 22, 2023) (the “Sixth Amendment Form S-1 Effectiveness”),
the purchase and issuance of $25.0 million in principal amount of Tranche C Notes shall take place; and (ii) for each other purchaser,
(A) no later than three business days after the effective date of the Sixth Amendment, the purchase and issuance of an aggregate principal
amount of Tranche C Notes equal to 50% of such purchaser’s commitment in respect of Tranche C Notes as indicated on the commitment
schedule in the Secured SPA shall take place, pursuant to which, on February 8, 2023, the Company received aggregate gross proceeds of
$30.0 million; and (B) no later than five business days after receipt of (a) the Sixth Amendment Authorized Share Increase, (b) the Sixth
Amendment Stockholder Approval, and (c) the Sixth Amendment Form S-1 Effectiveness, the purchase and issuance of the remaining aggregate
principal amount of the Tranche C Notes equal to 50% of such purchaser’s commitment in respect of Tranche C Notes as indicated
on the commitment schedule in the Secured SPA shall take place.
The funding of the Tranche C Notes are subject
to the following conditions precedent: (i) with respect to each funding of Tranche C Notes following the initial funding made within
three business days of the effective date of the Sixth Amendment, delivery by the Company of a notice identifying the business day of
the purchase and issuance of such Tranche C Notes, which date is to be no earlier than two business days and no later than 10 business
days after the date of such notice; (ii) delivery by the Company of a Secured SPA Warrant on the same terms as the Secured SPA Warrants
delivered in connection with the funding of Bridge Notes; (iii) delivery by the Company to such purchaser of the applicable Tranche C
Note; (iv) subject to certain waivers as described in the Secured SPA, there being no default or event of default; (v) payment by the
Company of all legal fees and other transaction expenses incurred by such Purchaser up to $0.15 million (or $0.3 million in the case
of Senyun and FF Simplicity) in the aggregate, which fees and expenses can be paid by, at the Company’s option, net funding of
the applicable Tranche C Notes; and (vi) that the representations and warranties contained in the related financing agreement are true
and correct in all material respects as of the applicable closing dates, as set forth therein.
The Tranche C Notes have a $1.05 base conversion
price (amended to $0.8925 pursuant to the Eighth Amendment) subject to full ratchet anti-dilution price protection and other adjustments
as set forth therein, five year interest make-whole (calculated using the greater of (x) $0.21 per share of Common Stock (amended to
$0.10 pursuant to the Eighth Amendment) and (y) 90% of the lowest VWAP for the five consecutive trading days ending on the trading day
that is immediately prior to the date on which interest is paid in shares of Class A Common Stock), 10% per annum interest rate (or 15%
if paid in Class A Common Stock subject to certain conditions). The Tranche C Notes and the Tranche D Notes (as defined below) and the
Secured SPA Warrants are subject to a pro rata cap on conversion or exercise (as applicable) equal to 19.99% of the Company’s Class
A Common Stock and Class B Common Stock as of the date of the Sixth Amendment until receipt of the Sixth Amendment Stockholder Approval.
All of the Secured SPA Notes and Secured SPA Warrants (and the Exchange Notes described below) are subject to restrictions on conversion
or exercise (other than an initial reserve of 63,051,933 shares of Class A Common Stock for FF Simplicity and 18,857,143 shares of Class
A Common Stock for Senyun) until the Sixth Amendment Authorized Share Increase, and the right for Purchasers to receive additional warrant
shares upon a down round financing has also been removed from all Secured SPA Warrants. The Company was required to use reasonable best
efforts to file a registration statement on Form S-1 on or prior to February 10, 2023 (which registration statement on Form S-1 (File
No. 333-269792) was filed with the SEC on February 13, 2023), and to seek effectiveness of such registration statement within 90 days
(which registration statement was declared effective by the SEC on March 22, 2023), and the Company was required to seek effectiveness
of the registration statement on Form S-1 (File No. 333-268972) on or prior to February 10, 2023 (which registration statement was declared
effective by the SEC on February 8, 2023). The Company was also required to use reasonable best efforts to obtain stockholder approval
of the Sixth Amendment Authorized Share Increase within 45 days (or 60 days if necessary) and the Sixth Amendment Stockholder Approval
within 60 days.
Each Purchaser also has the option to purchase
a certain amount of additional Secured SPA Notes and Secured SPA Warrants from time to time for 12 months from the effective date of
the Sixth Amendment, as set forth in the Secured SPA (such additional Secured SPA Notes, the “Tranche D Notes”). Additionally,
pursuant to the Sixth Amendment, (A) FF Simplicity and Senyun agreed that, with respect to their allotments of previous commitments to
purchase Secured SPA Notes, no more than the following percentages of their allotment may be purchased on or before the following dates
without the prior written consent of the Company: (i) 100% on or before February 10, 2023; (ii) 90% on or before February 28, 2023; (iii)
80% on or before March 24, 2023; (iv) 70% on or before April 21, 2023; and (v) 60% after April 21, 2023 through and including the twenty-fourth
month from the effective date of the Sixth Amendment, and (B) certain Secured SPA Notes issued to FF Simplicity with an aggregate outstanding
principal amount of $21.6 million and certain Secured SPA Notes issued to Senyun with an aggregate principal amount of $9.4 million were
replaced by new replacement notes with a $0.8925 base conversion price subject to full ratchet anti-dilution price protection and other
adjustments as set forth therein, six-year interest make-whole, and otherwise on similar terms as the previously issued Secured SPA Notes.
Pursuant to the Sixth Amendment and the Exchange
Agreements entered into concurrently therewith between the Company, on the one hand, and holders of Secured SPA Warrants, on the other
hand (collectively, the “Exchange Agreements”), (i) the provision under the Secured SPA Warrants then-issued that allowed
investors to receive the right to purchase additional shares in connection with down round financings was removed, (ii) certain other
warrants of ATW Partners LLC and FF Simplicity’s Secured SPA Warrants then issued, exercisable for an aggregate of 198,129,990
shares of Class A Common Stock, were exchanged for a combination of new warrants, exercisable at $0.2275 per share subject to full ratchet
anti-dilution price protection and other adjustments, for an aggregate of 42,489,346 shares of Class A Common Stock and new senior secured
convertible notes with aggregate principal amount of $25.0 million, and (ii) Senyun’s Secured SPA Warrants then issued, exercisable
for an aggregate amount of 276,270,842 shares of Class A Common Stock, were exchanged for a combination of new warrants, each exercisable
at $0.2275 per share subject to full ratchet anti-dilution price protection and other adjustments, for an aggregate of 48,000,000 shares
of Class A Common Stock and new senior secured convertible notes with aggregate principal amount of $16.0 million (collectively with
the notes issued pursuant to clause (ii), the “Exchange Notes”). The Exchange Notes are convertible at a conversion rate
calculated at the lesser of (a) 90% of the VWAP for the trading day that is immediately prior to the date on which interest is paid in
shares of Common Stock or (b) the greater of (x) $0.21 per share of Common Stock (amended to $0.10 pursuant to the Eighth Amendment)
and (y) 90% of the average VWAP for the five consecutive trading days ending on the trading day that is immediately prior to the date
on which interest is paid in shares of Common Stock. The Exchange Notes will constitute Secured SPA Notes, except: (i) the holders thereof
do not have the option under the Secured SPA to purchase certain additional Secured SPA Notes within 24 months from the effective date
of the Sixth Amendment; (ii) such notes are not subject to any prepayment premium or penalty applicable to other Secured SPA Notes; (iii)
such notes are not subject to an original discount of 10%; and (iv) such notes are not entitled to the most favorable terms granted to
other Secured SPA Notes purchased simultaneously or after the purchase of such notes. Such notes are prepayable and redeemable at par
at any time by the Company upon 15 days’ prior written notice.
On March 23, 2023, the Company entered into
an Amendment No. 7 (“Seventh Amendment”) to the Secured SPA with FF Simplicity, as administrative and collateral agent and
purchaser, Senyun as purchaser, and FF Prosperity as purchaser, pursuant to which the Company, Senyun, FF Prosperity and FF Simplicity
agreed to amend the funding timeline of certain Tranche C Notes, and FF Simplicity agreed to purchase additional notes under the Secured
SPA. Under the amended funding timeline, (i) Senyun agreed to purchase (a) $10.0 million in principal amount of Tranche C Notes (amended
to include an additional original issue discount of four percent (4%), which additional original issue discount shall not impact the
interest make-whole amount, as set forth in the Secured SPA, in such Tranche C Notes) no later than one business day (amended from five
business days) after the Sixth Amendment Form S-1 Effectiveness and receipt of the Sixth Amendment Stockholder Approval, subject to the
filing by the Company of a Current Report on Form 8-K disclosing such stockholder approval, and (b) $15.0 million in principal amount
of Tranche C Notes no later than five business days after the Sixth Amendment Form S-1 Effectiveness and receipt of the Sixth Amendment
Stockholder Approval, and (ii) FF Prosperity agreed to purchase the remaining aggregate principal amount of the Tranche C Notes equal
to 50% of FF Prosperity’s commitment in respect of Tranche C Notes (amended to include an additional original issue discount of
four percent (4%), which additional original issue discount shall not impact the interest make-whole amount, as set forth in the Secured
SPA, in such Tranche C Notes) no later than one business day (amended from five business days) after the Sixth Amendment Form S-1 Effectiveness
and receipt of the Sixth Amendment Stockholder Approval, subject to the filing by the Company of a Current Report on Form 8-K disclosing
such stockholder approval. FF Simplicity further agreed to purchase, on or prior to March 27, 2023, $5.0 million in principal amount
of Incremental Notes subject to an additional original issue discount of six percent (6%) (which additional original issue discount shall
not impact the interest make-whole amount, as set forth in the Secured SPA, in such Incremental Notes). Such notes were originally permitted
to be purchased on or prior to April 21, 2023. The Company also agreed to reimburse each of Senyun and FF Simplicity up to $0.02 million
each for reasonable and documented out-of-pocket legal expenses incurred in connection with the Seventh Amendment.
On May 8, 2023, the Company entered into an
Amendment No. 8 to the Secured SPA with Senyun as purchaser, and, on May 9, 2023, the Company entered into an Amendment to ATW Notes
and Warrants with FF Simplicity and FF Prosperity as purchasers (together, the “Eighth Amendment”). Pursuant to the Eighth
Amendment, the parties agreed to the following amendments to all outstanding and issuable Secured SPA Notes of Senyun, FF Simplicity
and FF Prosperity: (i) the floor price for conversion of the Secured SPA Notes was amended from $0.21 to $0.10 (or, for FF Simplicity
and FF Prosperity, if lower, the floor price of notes issued under the Unsecured SPA); (ii) each such Secured SPA Note was amended such
that interest on the Secured SPA Note, originally required to be paid on the aggregate unconverted and then outstanding principal amount
of each Secured SPA Note quarterly on January 1, April 1, July 1 and October 1, was amended to be payable upon conversion of principal
of the Secured SPA Note; (iii) the conversion price for the Secured SPA Notes was amended from $1.05 to $0.8925, subject to adjustment
as set forth in such Secured SPA Notes; and (iv) the exercise price for the Secured SPA Warrants was amended from $1.05 to $0.8925, subject
to adjustment as set forth in such Secured SPA Warrants.
On June 26, 2023, the Company entered into
a Joinder and Amendment Agreement (the “Unsecured SPA ATW Joinder”) with FF Vitality Ventures LLC (“FF Vitality”),
pursuant to which FF Simplicity or a permitted assign agreed to exercise its option to purchase $20,000,000 of Tranche B Notes in accordance
with the terms of the Secured SPA, with funding of 75% of such amount within five business days of the date of the Unsecured SPA ATW
Joinder and the remaining 25% of such amount within three business days thereafter, subject to the satisfaction of the following closing
conditions (the “Joinder Tranche B Closing Conditions”): (i) delivery of a warrant registered in the name of FF Simplicity
to FF Simplicity on the closing date to purchase up to a number of shares of Class A Common Stock equal to 33% of such shares issuable
to FF Simplicity upon conversion of the Tranche B Note, with an exercise price equal to $0.8925 per share, (ii) delivery to FF Simplicity
of the applicable Tranche B Note, (iii) subject to certain note waivers, no default or event of default exists, and (iv) subject to certain
note waivers, the representations and warranties in the Secured SPA documents are true and correct in all material respects (without
duplication of any materiality qualifier) both before and after giving effect to such Tranche B Note. If FF Simplicity exercises its
option to invest another $10,000,000 of Tranche B Notes in accordance with the terms of the Secured SPA on or prior to the later of (x)
August 1, 2023 and (y) four business days after the meeting of the Company’s stockholders for the Unsecured SPA Stockholder Approval,
then the Company agrees to subsequently amend the Unsecured SPA whereby FF Vitality will invest another $20,000,000 in New Unsecured
SPA Notes (as defined below) subject to terms substantially identical to those provided for in the Unsecured SPA in effect as of the
date of the Unsecured SPA ATW Joinder, including, without limitation, the funding date timeline.
On June 26, 2023, the Company entered into
a Second Joinder and Amendment Agreement (the “Unsecured SPA Senyun Joinder”) with Senyun, pursuant to which, Senyun or a
permitted assign agreed to exercise its option to purchase $15,000,000 of Secured SPA Notes in accordance with the terms of the Secured
SPA, with funding of 75% of such amount within five business days of the date of the Unsecured SPA Senyun Joinder and the remaining 25%
of such amount within three business days thereafter, subject to the satisfaction of the same Joinder Tranche B Closing Conditions as
described above. If Senyun exercises its option to invest another $10,000,000 of Secured SPA Notes in accordance with the terms of the
Secured SPA on or prior to the later of (x) August 1, 2023 and (y) four business days after the meeting of the Company’s stockholders
for the Unsecured SPA Stockholder Approval, then the Company agrees to subsequently amend the Unsecured SPA whereby Senyun will invest
another $20,000,000 in New Unsecured SPA Notes subject to terms substantially identical to those provided in the Unsecured SPA (in effect
as of the date of the Unsecured SPA Senyun Joinder, including, without limitation, the funding date timeline).
Unsecured SPA Warrants and Unsecured SPA Notes
On May 8, 2023, the Company entered into the
Unsecured SPA with Metaverse Horizon Limited and V W Investment Holding Limited (the “Unsecured SPA Purchasers”) to issue
and sell, subject to the satisfaction of certain closing conditions and limitations on enforcement, $100.0 million aggregate principal
amount of the Company’s senior unsecured convertible promissory notes, with (i) $15.0 million in the aggregate to be funded at
the first closings within five business days after satisfaction of certain conditions (the “First Closings”); (ii) $15.0
million in the aggregate to be funded within fifteen business days after each respective First Closing (the “Second Closings”);
(iii) $15.0 million in the aggregate to be funded within fifteen business days after each respective Second Closing (the “Third
Closings”); (iv) $5.0 million to be funded within fifteen business days after one of the Third Closings; (v) $10.0 million to be
funded within fifteen days after satisfaction of certain conditions (the “Fourth Closing”); (vi) $10.0 million to be funded
within fifteen days after the Fourth Closing (the “Fifth Closing”); (vii) $10.0 million to be funded within fifteen days
after the Fifth Closing (the “Sixth Closing”); (viii) $10.0 million to be funded within fifteen days after the Sixth Closing
(the “Seventh Closing”); and (ix) $10.0 million to be funded within fifteen days after the Seventh Closing. Between May 10,
2023 and May 23, 2023, the Company received gross proceeds pursuant to the Unsecured SPA totaling $7.5 million ($6.8 million net of original
issuance cost).
Each Unsecured SPA Purchaser will also have
the right to invest an additional 50% in the Company on terms and conditions substantially identical to the funded Unsecured SPA Note
upon at least 10 business days’ prior notice. In connection with the Unsecured SPA, the Company entered into equity commitment
letters with each of FF Global Partners Investment LLC, formerly FF Top Holding LLC (“FF Top”) and Mr. Lijun Jin to support
the obligations of the Unsecured SPA Purchasers under the Unsecured SPA subject to the limitations set forth therein. In the event of
a breach by FF Global and/or Mr. Jin of their obligations under their equity commitment letters with the Company, the Company may not
be able to recover the damages caused by such breach(es) due to the nature of FF Top’s and Mr. Jin’s assets, including the
fact that many of Mr. Jin’s assets are not located in the United States and FF Top’s only assets are shares of the Company’s
Class B common stock, par value $0.0001 per share (the “Class B Common Stock” and, together with the Class A Common Stock,
the “Common Stock”), a note payable from the Company, and a capital commitment from an investor with terms not disclosed
to the Company or third party beneficiary rights in favor of the Company.
The Unsecured SPA Notes are subject to an original
issue discount of 10%, and are convertible into shares of Class A Common Stock, at a conversion price equal to $0.8925, plus an interest
make-whole amount as set forth in the Unsecured SPA Notes, subject to certain adjustments including full ratchet anti-dilution price
protection. The shares of Class A Common Stock issuable upon conversion of the Unsecured SPA Notes are not transferable for 30 days after
the applicable last closing under such Unsecured SPA Note without the prior written consent of the Company (which consent shall not be
unreasonably withheld). Any Unsecured SPA Purchaser may postpone or cancel any closing pursuant to the Unsecured SPA in its reasonable
discretion if it reasonably determines, based on public information, that the first phase of FF’s three-phase delivery plan as
disclosed in public filings has not begun or will not begin prior to May 31, 2023 and/or the second phase of such delivery plan has not
begun or will not begin prior to June 30, 2023, in each case within 15 calendar days of such deadline (the “Unsecured SPA Condition”).
On June 26, 2023, the Unsecured SPA was amended pursuant to Amendment No. 1 to the Unsecured SPA (the “Unsecured SPA Amendment”),
pursuant to which the Unsecured SPA Condition was amended such that any Unsecured SPA Purchaser may, in its reasonable discretion, postpone
or cancel any closing pursuant to the Unsecured SPA if the Company has not issued a press release or other public announcement confirming
that the second phase of the Company’s three-phase delivery plan as disclosed in the Company’s public filings has begun or
on prior to August 31, 2023, within 15 calendar days of such date.
Each Unsecured SPA Note matures on the date
that is six years after the date of the applicable last closing under such Unsecured SPA Note. The Unsecured SPA Notes accrue interest
at 10% per annum, payable on each conversion date and the maturity date in cash, Class A Common Stock, or a combination thereof, provided
that, subject to certain conditions set forth in the Unsecured SPA Notes, the Company may elect to pay such interest in Class A Common
Stock at a rate equal to 15% per annum with respect to the portion of such payment made in Class A Common Stock. The Company may, from
time to time, prepay the principal amount owing under the Unsecured SPA Notes, subject a prepayment premium pursuant to the Unsecured
SPA, so long as (i) the Company provides at least 15 business days’ prior written notice to the applicable Unsecured SPA Purchasers
of such prepayment and delivers to the Unsecured SPA Purchasers an appropriately completed payment notification, (ii) the Company accompanies
such prepayment with the payment of any interest make-whole amount as set forth in the Unsecured SPA Notes, (iii) certain conditions
set forth in the Unsecured SPA Notes are met during each business day of the 15-business day notice period, and (iv) the Company waives
the restriction on transfer of the relevant Unsecured SPA Notes.
Under the Unsecured SPA Notes, at each closing,
the Unsecured SPA Purchaser is entitled to receive a warrant (an “Unsecured SPA Warrant”) registered in the name of such
Unsecured SPA Purchaser to purchase up to a number of shares of Class A Common Stock equal to 33% of such shares issuable to such Unsecured
SPA Purchaser upon conversion of the aggregate principal amount under the Unsecured SPA Note funded at such closing, with an exercise
price equal to $0.8925 per share, subject to full ratchet anti-dilution protection and other adjustments, and are exercisable for seven
(7) years on a cash or cashless basis.
In addition, under the Unsecured SPA Notes,
the funding of each closing under the Unsecured SPA Notes is subject to the satisfaction of the following closing conditions: (a) (i)
an effective registration statement with respect to the shares of Class A Common Stock issuable upon exercise of the Unsecured SPA Warrants
and the shares of Class A Common Stock issued and issuable pursuant to the terms of the Unsecured SPA Notes (including, without limitation,
shares of Class A Common Stock issued and issuable in lieu of the cash payment of interest on the Unsecured SPA Notes in accordance with
the terms thereof) (collectively, the “Underlying Shares”) for such closing and each previous closing in the aggregate and
(ii) with respect to any closing the Underlying Shares of which, together with the Underlying Shares of all previous closings, exceed
the unissued shares of Class A Common Stock reserved for issuance as Underlying Shares (the “Reserved Shares”), receipt by
the Company of Unsecured SPA Stockholder Approval (as defined below) (and the filing of an amendment to the Company’s certificate
of incorporation to reflect the Unsecured SPA Stockholder Approval to the extent needed); (b) solely with respect to the first closing
under such Unsecured SPA Note, the Company’s receipt of bank statements showing source(s) of funding with respect to the relevant
Unsecured SPA Purchaser’s funding obligations under such Unsecured SPA Note that are reasonably satisfactory to the Company; and
(c) a minimum volume weighted average price (“VWAP”) of the Class A Common Stock equal to no less than $0.10 during the five
(5) trading days prior to such closing.
Each Unsecured SPA Purchaser has the option,
from time to time for 12 months after the date of the Unsecured SPA, to purchase additional convertible senior unsecured notes and warrants
on the same terms as the Unsecured SPA Notes in an aggregate amount not to exceed 50% (or with the prior written consent of the Company,
100%) of the initial principal amount of the Unsecured SPA Notes issued to such Unsecured SPA Purchaser, subject to certain conditions.
Additionally, from the date of the Unsecured SPA until the date that is the five-year anniversary of the date of the Unsecured SPA, upon
any issuance by the Company or any of its subsidiaries of Class A Common Stock or Class A Common Stock equivalents for cash consideration,
indebtedness or a combination of units thereof (subject to certain exceptions set forth in the Unsecured SPA) or an issuance of Class
A Common Stock or Class A Common Stock equivalents under Section 4.25 of the Secured SPA (each, a “Subsequent Financing”),
each Unsecured SPA Purchaser that then owns at least $20.0 million principal amount of Unsecured SPA Notes (when aggregated with any
affiliates of such Unsecured SPA Purchaser) shall each have the right to participate in up to an amount of the Subsequent Financing such
that such Unsecured SPA Purchaser’s ownership of the Company remains the same immediately following such Subsequent Financing as
its ownership immediately prior to such Subsequent Financing, pursuant to the procedures outlined in the Unsecured SPA.
Pursuant to the Unsecured SPA, the Company
is required to use its reasonable best efforts to hold a special meeting of stockholders to (a) obtain stockholder approval to authorize
the entirety of the excess of the Underlying Shares over the Reserved Shares for issuance and for purposes of Nasdaq Listing Rule 5635
to the extent needed as promptly as practical under the circumstances after the date of the Unsecured SPA and prior to the date that
is 60 days following the date of the Unsecured SPA, and (b) to obtain stockholder approval, as is required by Nasdaq rules, of transactions
involving Unsecured SPA Notes and Unsecured SPA Warrants of the Company issued or to be issued pursuant to the Unsecured SPA, including
the issuance of any shares in excess of 19.99% of the issued and outstanding shares of the Company’s Common Stock in respect of
such notes and warrants ((a) and (b), together, “Unsecured SPA Stockholder Approval”). Pursuant to the Unsecured SPA, FF
Global irrevocably agreed to take reasonable efforts to vote in favor of the Unsecured SPA Stockholder Approval.
The Company is required to use its reasonable
best efforts (i) to file, on or prior to May 31, 2023, a registration statement providing for the resale by the Unsecured SPA Purchasers
of the Reserved Shares (the “First Registration Statement”); and (ii) to file, on or prior to the date that is 30 days following
the Company’s receipt of Unsecured SPA Stockholder Approval (and the filing of an amendment to the certificate of incorporation
of the Company to reflect such increased in authorized shares of Common Stock), a registration statement providing for the resale by
the Unsecured SPA Purchasers of all the remaining shares issuable pursuant to the financing documents (the “Second Registration
Statement” and, together with the First Registration Statement, the “Registration Statements”). The Company is also
required to use reasonable best efforts (i) to cause the First Registration Statement to become effective within 90 days following the
date of the Unsecured SPA; (ii) to cause the Second Registration Statement to become effective within 90 days following the Company’s
filing thereof; and (iii) to keep each Registration Statement effective at all times until no Unsecured SPA Purchaser owns any Unsecured
SPA Notes, Unsecured SPA Warrants, or shares of Class A Common Stock issuable upon exercise or conversion thereof.
On June 26, 2023, the Company entered into
the Unsecured SPA ATW Joinder with FF Vitality, pursuant to which FF Simplicity or a permitted assign agreed to exercise its option to
purchase $20,000,000 of Tranche B Notes in accordance with the terms of the Secured SPA, with funding of 75% of such amount within five
business days of the date of the Unsecured SPA ATW Joinder and the remaining 25% of such amount within three business days thereafter,
subject to the satisfaction of the Joinder Tranche B Closing Conditions: (i) delivery of a warrant registered in the name of FF Simplicity
to FF Simplicity on the closing date to purchase up to a number of shares of Class A Common Stock equal to 33% of such shares issuable
to FF Simplicity upon conversion of the Tranche B Note, with an exercise price equal to $0.8925 per share, (ii) delivery to FF Simplicity
of the applicable Tranche B Note, (iii) subject to certain note waivers, no default or event of default exists, and (iv) subject to certain
note waivers, the representations and warranties in the Secured SPA documents are true and correct in all material respects (without
duplication of any materiality qualifier) both before and after giving effect to such Tranche B Note. If FF Simplicity exercises its
option to invest another $10,000,000 of Tranche B Notes in accordance with the terms of the Secured SPA on or prior to the later of (x)
August 1, 2023 and (y) four business days after the meeting of the Company’s stockholders for the Unsecured SPA Stockholder Approval,
then the Company agrees to subsequently amend the Unsecured SPA whereby FF Vitality will invest another $20,000,000 in New Unsecured
SPA Notes (as defined below) subject to terms substantially identical to those provided for in the Unsecured SPA in effect as of the
date of the Unsecured SPA ATW Joinder, including, without limitation, the funding date timeline.
Pursuant to the Unsecured SPA ATW Joinder,
FF Vitality agreed to purchase, under the Unsecured SPA, Unsecured SPA Notes in an aggregate principal amount of up to $40,000,000 (collectively,
the “New Unsecured SPA Notes”) in installments, as follows: (i) $5.0 million in principal amount under the New Unsecured
SPA Notes within five business days after the satisfaction of the closing conditions described below (the “New Unsecured SPA Closing
Conditions”) or such earlier business day as designated by FF Vitality by notice to the Company (the “Joinder First Closing”);
(ii) $5.0 million in principal amount under the New Unsecured SPA Notes within 15 business days after the Joinder First Closing (the
“Joinder Second Closing”); (iii) $5.0 million in principal amount under the New Unsecured SPA Notes within 15 business days
after the Joinder Second Closing (the “Joinder Third Closing”); (iv) $5.0 million in principal amount under the New Unsecured
SPA Notes within 15 business days after the satisfaction of the Closing Conditions (the “Joinder Fourth Closing”); (v) $5.0
million in principal amount under the New Unsecured SPA Notes within 15 business days after the Joinder Fourth Closing (the “Joinder
Fifth Closing”); (vi) $5.0 million in principal amount under the New Unsecured SPA Notes within 15 business days after the Joinder
Fifth Closing (the “Joinder Sixth Closing”); (vii) $5.0 million in principal amount under the New Unsecured SPA Notes within
15 business days after the Joinder Sixth Closing (the “Joinder Seventh Closing”); and (viii) $5.0 million in principal amount
under the New Unsecured SPA Notes within 15 business days after the Joinder Seventh Closing (the “Joinder Eighth Closing”
and each of the Joinder First Closing, the Joinder Second Closing, the Joinder Third Closing, the Joinder Fourth closing, the Joinder
Fifth Closing, the Joinder Sixth Closing, the Joinder Seventh Closing and the Joinder Eighth Closing, a “Joinder Closing”).
The New Unsecured SPA Notes shall have a conversion
price of $0.8925 per share, subject to adjustment, as set forth in the Unsecured SPA, and the floor price of the New Unsecured SPA Notes
and, as amended pursuant to the Unsecured SPA ATW Joinder, for each of the notes issued to FF Simplicity (or its affiliates) under the
Secured SPA, shall be $0.05 (as adjusted for stock splits, stock dividends, stock combinations, recapitalization or other similar transactions
occurring thereafter) (or such lower amount as may be permitted under Nasdaq rules from time to time). The terms and conditions of the
New Unsecured SPA Notes cannot be amended, modified, supplemented or amended and restated without the consent of FF Vitality.
The funding of each Joinder Closing is also
subject to the following closing conditions (the “New Unsecured SPA Closing Conditions”): (a) an effective registration statement
with respect to the shares of Class A Common Stock issuable upon exercise of the Unsecured SPA Warrants and the shares of Class A Common
Stock issued and issuable pursuant to the terms of the New Unsecured SPA Notes (including, without limitation, shares of Class A Common
Stock issued and issuable in lieu of the cash payment of interest on the New Unsecured SPA Notes in accordance with the terms thereof)
(collectively, the “New Underlying Shares”) for such closing and (b) the Company shall have reserved the Required Reserve
Amount (as defined below) in full as of the date of such Joinder Closing.
Pursuant to the Unsecured SPA ATW Joinder,
FF Vitality may not convert any New Unsecured SPA Notes to the extent that such conversion would result that FF Vitality, together with
its affiliates and other persons acting as a group together with FF Vitality, would beneficially own in excess of 4.99% of the number
of the shares of Class A Common Stock outstanding prior to giving effect to such conversion. Upon notice to the Company, the New Unsecured
SPA Purchaser may increase or decrease such limitation threshold, provided it shall not exceed 4.99% of the number of shares of Class
A Common Stock outstanding after giving effect to such conversion. In addition, pursuant to the Unsecured SPA ATW Joinder, the Unsecured
SPA Warrants issued to FF Vitality in connection with the New Unsecured SPA Notes shall be subject to a beneficial ownership limitation
that is 4.99% of the number of shares of Class A Common Stock outstanding immediately after giving effect to the issuance of shares of
Class A Common Stock issuable upon the exercise of such Unsecured SPA Warrant, which limitation threshold may also increase or decrease
provided it shall not exceed 4.99% of the number of shares of Class A Common Stock outstanding immediately after giving effect to the
issuance of shares of Class A Common Stock upon exercise of such Unsecured SPA Warrant, subject to the provision of the Unsecured SPA
Warrant.
In addition, pursuant to the Unsecured SPA
ATW Joinder, the Unsecured SPA was further amended to provide that each Unsecured SPA Purchaser and FF Vitality has the option, upon
written notice to the Company, to purchase from time to time for 12 months from May 8, 2023 and from June 25, 2023, respectively, additional
convertible senior unsecured notes and warrants on the same terms as the New Unsecured SPA Notes (the “Additional Unsecured SPA
Notes”), in an amount not to exceed 50% or 100% (the latter with the prior written consent of the Company) of the initial principal
amount of the Unsecured SPA Notes issued to such purchaser pursuant to Section 2.1(a) of the Unsecured SPA and purchased for cash.
Pursuant to the Unsecured SPA ATW Joinder,
the Company’s lack of sufficient authorized or registered shares to serve as underlying shares of the outstanding Secured SPA Notes
and related Secured SPA Warrants and Unsecured SPA Notes and related Unsecured SPA Warrants is not deemed a breach of the Secured SPA,
Unsecured SPA and related notes and warrants, as a result thereof. However, at any time any Secured SPA Notes remain outstanding (and
any New Unsecured SPA Notes, Additional Unsecured SPA Notes and/or New Exchange Notes then outstanding or then issuable in connection
with a transaction in which such determination is being made) (collectively, the “applicable Notes”), the Company shall use
reasonable best efforts to at all times have authorized, and reserved for the purpose of issuance, no less than 100% of the maximum number
of shares of Class A Common Stock issuable upon conversion of all the Applicable Notes then outstanding and any New Unsecured SPA Notes,
Additional Unsecured SPA Notes and/or New Exchange Notes then issuable in connection with a transaction in which such determination is
being made (assuming for purposes hereof that any conversion of any Applicable Note shall not take into account any limitations on the
conversion of such Applicable Note), (collectively, the “Required Reserve Amount”). The Required Reserved Amount shall not
be reduced other than proportionally in connection with any conversion, exchange and/or redemption, as applicable. If the Company lacks
shares sufficient to meet the Required Reserved Amount, it shall use reasonable best efforts to promptly take all corporate action necessary
to authorize and reserve a sufficient number of shares, including, without limitation, calling a special meeting of stockholders to obtain
stockholder approval to increase the Company’s authorized number of shares of Class A Common Stock, and voting the management shares
of the Company in favor of such an increase.
Pursuant to the Unsecured SPA ATW Joinder,
and in accordance with the provisions of the Secured SPA and Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities
Act”), FF Vitality agreed, on behalf of its affiliates, that after the date of the Unsecured SPA ATW Joinder, FF Simplicity may
deliver written notice (each, an “Exchange Notice,” and the date of such applicable Exchange Notice, each, an “Exchange
Date”) to exchange (each, an “Exchange”) any Tranche B Notes, in whole or in part (each, an “Exchanging Note,”
and such outstanding amounts thereunder, each, an “Exchanging Amount”), for either (x) Tranche D Notes (as defined in the
Secured SPA), and/or (y) for any Additional Unsecured SPA Note under the Unsecured SPA, as applicable, (as set forth in such applicable
Exchange Notice, each a “New Exchange Note,” and as converted, each a “New Exchange Conversion Share”). Each
Exchange shall automatically be deemed to be consummated on the corresponding Exchange Date and, upon the delivery of such Exchange Notice,
FF Simplicity shall automatically be deemed to have exchanged the applicable Exchanging Amount of the applicable Exchanging Note for
a New Exchange Note with an aggregate amount outstanding equal to the Exchanging Amount. The Company shall deliver a convertible note
certificate evidencing such New Exchange Note to FF Simplicity (or its designee) by no later than the fourth trading day after the Exchange
Date (or such other date agreed upon by FF Simplicity and the Company). On such Exchange Date, FF Simplicity shall automatically be deemed
to be the holder of such New Exchange Note, with full power to convert, redeem or otherwise enforce the terms and conditions of the New
Exchange Note on or after such Exchange Date, whether or not the Company shall have delivered the convertible note certificate evidencing
such New Exchange Note to FF Simplicity (or its designee) on or prior to such date of determination. The consummation of an Exchange
shall reduce FF Simplicity’s optionality for Tranche D Notes and/or Additional Unsecured SPA Notes, as applicable, under the Secured
SPA or Unsecured SPA, respectively, as applicable, for such corresponding Exchanging Amount and restore such optionality for the Tranche
B Notes in accordance with the terms of the Secured SPA in effect as of the date of the Unsecured SPA ATW Joinder.
Assuming FF Simplicity is not then considered
an “affiliate” of the Company under applicable rules, the holding period of the New Exchange Notes (and upon conversion of
the New Exchange Notes, the New Exchange Conversion Shares) shall commence at the original issuance of such corresponding Exchanging
Note and shall not be re-set in connection with such applicable Exchange. For the avoidance of doubt, and for purposes of Rule 144 under
the Securities Act, the Company acknowledged and agreed that the holding period of the New Exchange Notes (and upon conversion of the
New Exchange Notes, the New Exchange Conversion Shares) may be tacked onto the holding period of the Exchanging Notes, and the Company
agreed not to take a contrary position.
In the Unsecured SPA ATW Joinder, the Company
represented and warranted to FF Simplicity that (i) no brokerage or finder’s fees or commission were or will be payable by the
Company or any of its subsidiaries in connection with the Exchange, the applicable Exchange Amount of the Exchanging Note being the sole
consideration conveyed to the Company for the New Exchange Note (and upon conversion of such New Exchange Note, the New Exchange Conversion
Shares) and no other consideration has or will be paid for such New Exchange Note; (ii) the Company has not, nor has any person acting
on its behalf, directly or indirectly made any offers or sales of any security or solicited any offers to buy any security under circumstances
that would cause the Exchange and the issuance of the applicable New Exchange Note (and upon conversion of such New Exchange Notes, the
New Exchange Conversion Shares) pursuant to such Exchange to be integrated with prior offerings by the Company for purposes of the Securities
Act, which would prevent the Company from delivering such applicable New Exchange Note (and upon conversion of such New Exchange Note,
the New Exchange Conversion Shares) pursuant to Section 3(a)(9) of the Securities Act, and the Company will not cause the applicable
Exchange, issuance and delivery of such New Exchange Note (and upon conversion of such New Exchange Note, the New Exchange Conversion
Shares) to be integrated with other offerings to the effect that the delivery of such New Exchange Note (and upon conversion of such
New Exchange Note, the New Exchange Conversion Shares) to FF Simplicity would be seen not to be exempt pursuant to Section 3(a)(9) of
the Securities Act; and (iii) other than legal counsel, the Company has not (and will not have) engaged any third parties to assist in
the solicitation with respect to the Exchange.
Pursuant to the Unsecured SPA ATW Joinder,
the Company agreed to pay FF Vitality a one-time $300,000 working fee and legal fees not to exceed $350,000, which shall be paid by netting
the purchase price for any New Unsecured SPA Notes with the amount of such fees.
On June 26, 2023, the Company entered into
the Unsecured SPA Senyun Joinder with Senyun, pursuant to which Senyun or a permitted assign agreed to exercise its option to purchase
$15,000,000 of Secured SPA Notes in accordance with the terms of the Secured SPA, with funding of 75% of such amount within five business
days of the date of the Unsecured SPA Senyun Joinder and the remaining 25% of such amount within three business days thereafter, subject
to the satisfaction of the same Joinder Tranche B Closing Conditions as described above. If Senyun exercises its option to invest another
$10,000,000 of Secured SPA Notes in accordance with the terms of the Secured SPA on or prior to the later of (x) August 1, 2023 and (y)
four business days after the meeting of the Company’s stockholders for the Unsecured SPA Stockholder Approval, then the Company
agrees to subsequently amend the Unsecured SPA whereby Senyun will invest another $20,000,000 in New Unsecured SPA Notes subject to terms
substantially identical to those provided in the Unsecured SPA (in effect as of the date of the Unsecured SPA Senyun Joinder, including,
without limitation, the funding date timeline).
Pursuant to the Unsecured SPA Senyun Joinder,
Senyun agreed to purchase, under the Unsecured SPA, Unsecured SPA Notes (the “New Senyun Notes”) in an aggregate principal
amount of up to $30,000,000 in installments of $3.75 million at each of the eight closing dates. The floor price of the New Senyun Notes
pursuant to the Unsecured SPA Senyun Joinder, and as amended pursuant to the Unsecured SPA Senyun Joinder, for each note issued to Senyun
(or its affiliates) under the Secured SPA, shall be $0.05 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations
or other similar transactions occurring thereafter).
The other material terms of the Unsecured SPA
Senyun Joinder are the same as those set forth in the Unsecured SPA ATW Joinder described above, except (i) the applicable ownership
limitations for notes and warrants pursuant to the Unsecured SPA Senyun Joinder are each 9.99% (instead of 4.99%, in each case, set forth
in the Unsecured SPA ATW Joinder), (ii) Senyun retained any right to preserve any potential dispute with regards to a conversion request
that was sent to the Company in May 2023, and (iii) the one-time working fee and legal fees that the Company agreed to pay to Senyun
were $225,000 and up to $262,500, respectively.
On June 26, 2023, the Unsecured SPA Purchasers
executed a letter consent to the Unsecured SPA ATW Joinder and Unsecured SPA Senyun Joinder, and agreed specifically to Section 17 of
each of the Unsecured SPA ATW Joinder and Unsecured SPA Senyun Joinder, which states that (i) each shall not otherwise trigger any adjustment
to the conversion or exercise price of the notes and warrants under the Secured SPA and Unsecured SPA, and (ii) that each of Senyun,
FF Simplicity and FF Prosperity waived any such rights to any adjustment to the conversion or exercise price in each of the Secured SPA
and/or the Unsecured SPA, as applicable, and the related notes and warrants.
Certain Anti-Takeover Provisions of Delaware Law, Our Amended
and Restated Certificate of Incorporation and Our Amended and Restated Bylaws
Under the Amended and Restated Charter, FF
has certain anti-takeover provisions in place as follows:
Special Meeting of Stockholders
The Amended and Restated Bylaws provide that
special meetings of stockholders may be called only by (i) the Chairperson of the Board, (ii) the chief executive officer or (iii) a
majority vote of the Board.
Advance Notice Requirements for Stockholder Proposals and
Director Nominations
The Amended and Restated Bylaws provide that
stockholders seeking to bring business before FF’s special meeting of stockholders, or to nominate candidates for election as directors
at FF’s special meeting of stockholders, must provide timely notice of their intent in writing subject to certain exceptions for
FF Top Board designees under the Shareholder Agreement. To be timely, a stockholder’s notice will need to be received by FF secretary
at FF’s principal executive offices no later than the close of business on the 90th day nor earlier than the open
of business on the 120th day prior to the anniversary date of the immediately preceding special meeting of stockholders.
Pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), proposals
seeking inclusion in FF’s annual proxy statement must comply with the notice periods contained therein. The Amended and Restated
Bylaws also specify certain requirements as to the form and content of a stockholders’ meeting. These provisions may preclude FF
stockholders from bringing matters before the special meeting of stockholders or from making nominations for directors at FF’s
special meeting of stockholders.
Authorized but Unissued Shares
FF’s authorized but unissued Common Stock
and Preferred Stock will be available for future issuances without stockholder approval and could be utilized for a variety of corporate
purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized
but unissued and unreserved Common Stock and Preferred Stock could render more difficult or discourage an attempt to obtain control of
FF by means of a proxy contest, tender offer, merger or otherwise.
Exclusive Forum Selection
The Amended and Restated Charter requires,
to the fullest extent permitted by law, that derivative actions brought in FF’s name, actions against directors, officers and employees
for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in the State of Delaware and, if
brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s
counsel except any action (A) as to which the Court of Chancery in the State of Delaware determines that there is an indispensable party
not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of
the Court of Chancery within 10 days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum
other than the Court of Chancery or (C) for which the Court of Chancery does not have subject matter jurisdiction. The Amended and Restated
Charter also requires that the federal district courts of the United States of America be the exclusive forum for the resolution of any
complaint asserting a cause of action arising under the Securities Act and/or the Exchange Act. Any person or entity purchasing
or otherwise acquiring any interest in shares of Common Stock shall be deemed to have notice of and consented to the forum provisions
in the Amended and Restated Charter.
This choice of forum provision may limit a
stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with FF or any of FF’s directors,
officers, other employees or stockholders, which may discourage lawsuits with respect to such claims. FF cannot be certain that a court
will decide that this provision is either applicable or enforceable, and if a court were to find the choice of forum provision contained
in the Amended and Restated Charter to be inapplicable or unenforceable in an action, FF may incur additional costs associated with resolving
such action in other jurisdictions, which could harm FF’s business, operating results and financial condition.
The Amended and Restated Charter provides that
the exclusive forum provision will be applicable to the fullest extent permitted by applicable law.
Limitation on Liability and Indemnification of Directors
and Officers
The Amended and Restated Charter provides that
directors and officers will be indemnified by FF to the fullest extent authorized by Delaware law as it now exists or may in the future
be amended.
The Amended and Restated Bylaws also permit
FF to secure insurance on behalf of any officer, director or employee for any liability arising out of his or her actions, regardless
of whether Delaware law would permit indemnification. FF has purchased a policy of directors’ and officers’ liability insurance
that insures FF’s directors and officers against the cost of defense, settlement or payment of a judgment in some circumstances
and insures FF against its obligations to indemnify the directors and officers.
These provisions may discourage stockholders
from bringing a lawsuit against FF’s directors for breach of their fiduciary duty. These provisions also may have the effect of
reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise
benefit FF and FF stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent FF pays the costs
of settlement and damage awards against directors and officers pursuant to these indemnification provisions. We believe that these provisions,
the insurance and the indemnity agreements are necessary to attract and retain talented and experienced directors and officers.
Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to FF’s directors, officers and controlling persons pursuant to the
foregoing provisions, or otherwise, FF has been advised that, in the opinion of the SEC, such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable.
Supermajority Vote to Amend Certain Provisions of our Bylaws
and Amended and Restated Charter
Our Amended and Restated Charter requires the
affirmative vote of the holders of at least two-thirds in voting power of the outstanding shares of our capital stock entitled to vote
thereon to amend certain provisions of our Amended and Restated Charter. In addition, our Bylaws provide that stockholders shall have
the power to adopt, amend or repeal the Bylaws; provided, however, that such action by stockholders shall require the affirmative vote
of the holders of at least two-thirds in voting power of the outstanding shares of our capital stock entitled to vote thereon.
Section 203 of the Delaware General Corporation Law
We are subject to Section 203 of the DGCL,
which provides that, subject to certain stated exceptions, a corporation may not engage in a business combination with any “interested
stockholder” (as defined below) for a period of three years following the time that such stockholder became an interested stockholder,
unless:
| ● | prior to such time
the board of directors of the corporation approved either the business combination or transaction
which resulted in the stockholder becoming an interested stockholder; |
| ● | upon
consummation of the transaction which resulted in the stockholder becoming an interested
stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced, excluding shares owned by persons who
are directors and also officers and employee stock plans in which participants do not have
the right to determine confidentially whether shares held subject to the plan will be tendered
in a tender or exchange offer; |
| ● | at
or subsequent to such time, the business combination is approved by the board of directors
and authorized at an annual or special meeting of stockholders, and not by written consent;
or |
| ● | by
the affirmative vote of 66 2/3% of the outstanding voting stock which is not owned by the
interested stockholder. |
An “interested stockholder” is
any person (other than the corporation and any direct or indirect majority-owned subsidiary) who owns 15% or more of the outstanding
voting stock of the corporation or is an affiliate or associate of the corporation and was the owner of 15% or more of the outstanding
voting stock of the corporation at any time within the three-year period immediately prior to the date of determination, and the affiliates
and associates of such person.
Anti-Takeover Effect of Certain Provisions of the DGCL and of
our Amended and Restated Charter and Bylaws
Certain provisions of DGCL and of our Amended
and Restated Charter and Bylaws discussed above, including provisions relating to our staggered board of directors, the removal of directors
and the filling of vacancies, the advance notice provisions, the prohibition on stockholder action by written consent and the supermajority
vote requirement to amend our Bylaws and certain provisions of our Amended and Restated Charter, alone or in combination, could make
the acquisition of us more difficult and could delay, defer or prevent a tender offer or other takeover attempt that a stockholder might
consider to be in its best interest, including takeover attempts that might result in the payment of a premium to stockholders over the
market price for their shares. These provisions also may promote the continuity of our management by making it more difficult for a person
to remove or change the incumbent members of our board of directors.