09/04/2024 | Press release | Distributed by Public on 09/04/2024 18:01
Item 1.01. Entry Into a Material Definitive Agreement.
As previously reported, effective as of October 18, 2023, Agrify Corporation (the "Company") entered into a Modification and Settlement Agreement (the "Modification Agreement") with Mack Molding Company ("Mack"). Pursuant to the Modification Agreement, the Company and Mack agreed to settle an outstanding dispute of approximately $8.24 million under the Supply Agreement between the parties dated December 7, 2020 (the "Supply Agreement") by reducing the aggregate amount due to Mack and extending the timeline for payment. The Modification Agreement required the Company to make payments of $500,000 and $250,000 to Mack on or before November 1, 2023 and February 15, 2024, respectively. Following the November 1, 2023 payment, the Company was entitled to take possession of certain Vertical Farming Units ("VFUs") that were assembled under the Supply Agreement. The Modification Agreement also required the Company to purchase from Mack a minimum of 25 VFUs per quarter for each quarter during 2024 and a minimum of 50 VFUs per quarter for the six quarters beginning with the first quarter of 2025. The Company is required to pay a storage fee of $25,000 per month for VFUs subject to the Modification Agreement. Additionally, as part of the Modification Agreement, the Company agreed to issue to Mack a warrant (the "Mack Warrant") to purchase 750,000 shares of the Company's common stock at an exercise price of $4.00 per share.
On August 30, 2024, the Company and Mack entered into an amendment to the Modification Agreement (the "Amendment"), which modified the payment terms and VFU purchase requirements under the Modification Agreement. Pursuant to the Amendment, the Company agreed to make payments of $1.0 million prior to October 31, 2024 and an additional $1.0 million prior to December 31, 2024. The Company also agreed to purchase at least 25 VFUs prior to October 31, 2024 and a further 25 VFUs between November 1, 2024 and December 31, 2024. Upon payment in accordance with the terms of the Amendment, the Company will be entitled to certain residual inventory in the possession of Mack, and the Mack Warrant will be terminated.
The foregoing summary of the Amendment does not purport to be complete, and is qualified in its entirety by reference to a copy of the Amendment that is filed as Exhibit 10.1 hereto.