BGXX Bright Green Corporation

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

 

Date of Report (date of earliest event reported) September 16, 2024

 

BRIGHT GREEN CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware		001-41395		83-4600841
(State or other jurisdiction of incorporation or organization)		(Commission File Number)		(I.R.S. Employer Identification Number)

 

1033 George Hanosh Boulevard

Grants, NM 87020

(Address of principal executive offices and zip code)

 

(833) 658-1799

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.0001 per share		BGXX		Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

Item 1.01. Entry into a Material Definitive Agreement.

 

On September 16, 2024, Bright Green Corporation (the “Company”) and Lynn Stockwell (“Lender”) entered into a Secured Amended and Restated Line of Credit Note, which is filed as Exhibit 10.1 to this Current Report on Form 8-K, amending and restating the terms of the original note entered into on November 14, 2022, which was originally amended and restated August 19, 2024 (as amended and restated, the “Note”).

 

The Note provides, among other things, upon the Lender making a new advance in the principal amount of at least $2,500,000 under the terms of the Note (the “Required Funding”) to be received by the Company no later than two business days following the execution of the Note, all obligations due under the Note shall be secured by (i) a first lien mortgage on the Company’s fee interest in the real property and improvements thereon, including, without limitation, the land, buildings, fixtures, equipment and machinery located at 1033 George Hanosh Blvd, Grants, NM 87020 (the “Property”) and a first priority assignment of leases and rents, (ii) a first priority security interest in all accounts receivable of Company, (iii) an assignment of all contracts, licenses, permits, plans, specifications and other documentation with respect to the Property, and (iv) such other collateral as is customary for a loan of this type, including additional real property if the acquisition of such property occurs while this Note is outstanding.

 

The Note also provides for a conversion feature pursuant to which Lender may, at Lender’s discretion, convert up to $4 million of the outstanding principal and interest balance of the Note into shares of the Company’s newly designated Series A Preferred Stock, par value $0.0001 (the “Series A Preferred Stock”) at a conversion price of $0.40 per share, provided the Required Funding was received. Further pursuant to the terms of the Note, the Company agreed to file the Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Voting Preferred Stock with the Delaware Secretary of State, which is filed as Exhibit 3.1 to this Current Report on Form 8-K (the “Certificate of Designation”), within two business days following receipt of the Required Funding.

 

Pursuant to the Certificate of Designation, each share of Series A Preferred Stock, subject to the Stockholder Approval (as defined below), shall be convertible at the election of the holder (or automatically if the balance is not repaid by December 31, 2024), into 14 shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock” and the shares of Common Stock issuable upon conversion of the Series A Preferred Stock, the “Conversion Shares”). Each share of Series A Preferred Stock is generally entitled to one vote per share, provided that no shares of Series A Preferred Stock are entitled to vote on the proposal related to the Stockholder Approval to occur at a meeting of stockholders. Other than the right of each holder to convert the Series A Preferred Stock into the Conversion Share, subject to the Stockholder Approval, there Series A Preferred Stock has equal distribution and dividend rights as the Common Stock.

 

Subject to the terms and limitations contained in the Certificate of Designation, the Series A Preferred Stock will not be convertible into Common Stock until the Company’s stockholders approve the issuance of the Conversion Shares upon conversion of the Series A Preferred Stock (the “Stockholder Approval”). The Stockholder Approval is required because, if and when the Conversion Shares would be issued, it represents the issuance of shares of Common Stock by the Company (i) to Lender, a director of the Company, below the “Minimum Value” as defined by The Nasdaq Stock Market, LLC, (ii) representing the potential issuance of more than 19.99% of the outstanding Common Stock of the Company below the “Minimum Price”, and (iii) representing a potential “change of control” of the Company. The Certificate of Designation provides that as soon as practicable, after the Required Funding has been received, the Company will file a preliminary proxy statement for a vote of the Company’s stockholders to approve the issuance of the Conversion Shares, if and when the shares of Series A Preferred Stock are issued upon conversion of the Note.

 

 

The Note contains certain representations and warranties, covenants and indemnities customary for similar transactions. The representations, warranties and covenants contained in the Note were made solely for the benefit of the parties to the Note and may be subject to limitations agreed upon by the contracting parties.

 

The foregoing descriptions of the Certificate of Designation and the Note do not purport to be complete and are qualified in their entirety by the full text of the Certificate of Designation and the Note, which are filed as Exhibit 3.1 and Exhibit 10.1 to this Current Report on Form 8-K, respectively, and are incorporated herein by reference.

 

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

The information contained above in Item 1.01 is hereby incorporated by reference into this Item 2.03.

 

Item 3.02 Unregistered Sales of Equity Securities.

 

The information contained above in Item 1.01 is hereby incorporated by reference into this Item 3.02. Upon conversion of the Note, the Series A Preferred Stock, and upon conversion of the Series A Preferred Stock, the Conversion Shares, will be issued without registration under the Securities Act of 1933, as amended, in reliance upon the exemptions therefrom in transactions not involving a public offering, and in reliance on similar exemptions under applicable state laws.

 

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

 

The information contained above in Item 1.01 is hereby incorporated by reference into this Item 5.03.

 

Item 9.01 Financial Statements and Exhibits.

 

Exhibit Number		Description
3.1		Certificate of Designation of Preferences, Rights and Limitations of the Series A Convertible Voting Preferred Stock
10.1		Secured Amended and Restated Line of Credit Note dated September 16, 2024, between Bright Green Corporation and Lynn Stockwell
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: September 18, 2024	Bright Green Corporation
	By:	/s/ Saleem Elmasri
		Saleem Elmasri
		Chief Financial Officer

 

 

 

Exhibit 3.1

 

BRIGHT GREEN CORPORATION

CERTIFICATE OF DESIGNATION OF PREFERENCES, RIGHTS AND LIMITATIONS

OF

SERIES A CONVERTIBLE VOTING PREFERRED STOCK

 

PURSUANT TO SECTION 151 OF THE

DELAWARE GENERAL CORPORATION LAW

 

BRIGHT GREEN CORPORATION, a Delaware corporation (the “Corporation”), in accordance with the provisions of Section 103 of the Delaware General Corporation Law (the “DGCL”) does hereby certify that, in accordance with Sections 141(c) and 151 of the DGCL, the following resolution was duly adopted by a committee of the Board of Directors of the Corporation acting upon authority delegated by the Board of Directors, which resolution remains in full force and effect on the date hereof:

 

RESOLVED, pursuant to authority expressly set forth in the Certificate of Incorporation of the Corporation (the “Certificate of Incorporation”), the issuance of a series of Preferred Stock designated as the Series A Convertible Voting Preferred Stock, par value $0.0001 per share, of the Corporation is hereby authorized and the designation, number of shares, powers, preferences, rights, qualifications, limitations and restrictions thereof (in addition to any provisions set forth in the Certificate of Incorporation that are applicable to the Preferred Stock of all classes and series) are hereby fixed, and the Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Voting Preferred Stock is hereby approved as follows, pursuant to that certain SECURED AMENDED AND RESTATED LINE OF CREDIT NOTE, dated September 16, 2024 (the “Note”) entered into between the Corporation and the Lender (as such term is defined in the Note):

 

SERIES A CONVERTIBLE VOTING PREFERRED STOCK

 

1. Definitions. For the purposes hereof, the following terms shall have the following meanings

 

“Commission” means the U.S. Securities and Exchange Commission.

 

“Common Stock” means the Corporation’s common stock, par value $0.0001 per share, and stock of any other class of securities into which such securities may hereafter be reclassified into.

 

“Conversion Date” means the date on which the Series A Preferred Stock is converted pursuant to Section 5.

 

“Conversion Shares” means the shares of Common Stock issuable upon conversion of the Series A Preferred Stock.

 

“DGCL” shall mean the Delaware General Corporation Law.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Holder” means any holder of Series A Preferred Stock.

 

“Per Share Purchase Price” means $0.40 per share.

 

“Person” means any individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“Proposal” has the meaning set forth in Section 7.

 

“Requisite Approval” means the date that the Corporation’s stockholders first approve the Proposal.

 

 

“Series A Preferred Stock” has the meaning set forth in Section 2(a).

 

“Trading Day” means a day on which the Common Stock is traded for any period on a principal securities exchange or if the Common Stock is not traded on a principal securities exchange, on a day that the Common Stock is traded on another securities market on which the Common Stock is then being traded.

 

2. Designation, Amount and Par Value; Assignment; Ranking.

 

(a). The distinctive serial designations of the series of Preferred Stock designated by this Certificate of Designation shall be designated as the Corporation’s Series A Convertible Preferred Stock (the “Series A Preferred Stock”). The number of shares of Series A Preferred Stock so designated shall be 10,000,000. The Series A Preferred Stock shall have a par value of $0.0001 per share.

 

(b). The Corporation shall register shares of the Series A Preferred Stock, upon records to be maintained by the Corporation’s transfer agent for that purpose (the “Series A Preferred Stock Register”), in the name of the Holder. The Corporation and its transfer agent may deem and treat the registered Holder of shares of Series A Preferred Stock as the absolute owner thereof for the purpose of any conversion thereof and for all other purposes. Shares of Series A Preferred Stock may be issued solely in book-entry form. The Corporation or its transfer agent shall register the transfer of any shares of Series A Preferred Stock in the Series A Preferred Stock Register, upon surrender of the shares of Series A Preferred Stock evidencing such shares to be transferred, to the Corporation’s transfer agent. Upon any such registration or transfer, a new or book-entry notation evidencing the shares of Series A Preferred Stock so transferred shall be issued to the transferee and a new book-entry notation evidencing the remaining portion of the shares not so transferred, if any, shall be issued to the transferring Holder, in each case, within three Business Days. The provisions of this Certificate of Designation are intended to be for the benefit of all Holders from time to time and shall be enforceable by any such Holder.

 

3. Dividends. At all times following the Issuance Date, while shares of Series A Preferred Stock are issued and outstanding, holders of Series A Preferred Stock shall be entitled to receive, and the Corporation shall pay, dividends on shares of Series A Preferred Stock equal (on an as-if-converted-to-Common-Stock basis and without regard to any limitations on conversion set forth herein or otherwise) to and in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock.

 

4. Voting Rights. Each share of Series A Preferred Stock is entitled to one (1) vote per share, and shall vote together with the Common Stock, provided that no shares of Series A Preferred Stock are entitled to vote on the Proposal.

 

5. Conversion.

 

(a) No Conversion. Prior to the receipt of the Requisite Approval, subject to, the Series A Preferred Stock is not convertible by the Holder thereof.

 

(b) Election of Holder. Each share of Series A Preferred Stock shall be convertible, provided the Per Share Purchase Price has been paid by the Holder to the Corporation prior to the date thereof, into fourteen (14) shares of Common Stock (the “Conversion Ratio”). Any Holder shall provide written notice to the Company, which shall be dated, executed by the Holder, and set forth the number of shares of Series A Preferred Stock which shall be converted into shares of Common Stock. Delivery of such shares of Common Stock shall occur on the second (2nd) Trading Day following the Company’s receipt of notice.

 

(c) Automatic Conversion.

 

a.

Change of Control or Similar Event. On the second (2nd) Trading Day following the public announcement of a change of control transaction, which shall include a reorganization, merger, business combination, or similar transaction (but which for avoidance of doubt shall not include the issuance of the Series A Preferred Stock), provided the Requisite Approval has been obtained (the “Conversion Date”), and provided the Per Share Purchase Price has been paid by the Holder to the Corporation prior to the date thereof, each share of Series A Preferred Stock issued and outstanding shall automatically convert into shares of Common Stock at the Conversion Ratio.

 

 

b.

Default. If the Corporation is unable to pay the Lender all outstanding principal and accrued interest under the Note by December 31, 2024, then on the second (2nd) Trading Day after such date, provided the Requisite Approval has been obtained, and provided the Per Share Purchase Price has been paid by the Holder to the Corporation prior to the date thereof, each share of Series A Preferred Stock issued and outstanding shall automatically convert into shares of Common Stock at the Conversion Ratio.

 

(d) Reservation of Shares. The Corporation covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of the Series A Preferred Stock, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holders of the Series A Preferred Stock, not less than such aggregate number of shares of the Common Stock as shall be issuable upon the conversion of all shares of Series A Preferred Stock. The Corporation covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid, non-assessable and free and clear of all liens and other encumbrances.

 

(e) Fractional Shares. No fractional shares or scrip representing fractional shares of Common Stock shall be issued upon the conversion of the Series A Preferred Stock. All fractional shares shall be rounded down to the nearest whole shares of Common Stock.

 

6. Requisite Approval. The Corporation shall, as soon as practicable following the Issuance Date, file a preliminary proxy statement for a vote of its stockholders to approve the issuance of all Conversion Shares (the “Proposal”). The Corporation shall, as soon as practicable following notification from the staff of the Commission that it has completed its review of the preliminary proxy statement or that it will not review the preliminary proxy statement, file and mail a definitive proxy statement for the vote of its stockholders to approve the Proposal. The Corporation covenants and agrees that its Board of Directors shall unanimously recommend that the Proposal be approved by the Corporation’s stockholders at all meetings in which the Proposal is considered. If the Corporation’s stockholders do not approve such Proposal at the first meeting in which they is voted on by stockholders, the Corporation covenants and agrees that it will submit the Proposal for approval of the Corporation’s stockholders at least semi-annually until such approval is obtained.

 

7. Miscellaneous.

 

(a). Waivers; Amendments. Any waiver by the Corporation or a Holder of a breach of any provision of this Certificate of Designation shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Certificate of Designation or a waiver by any other Holders. The failure of the Corporation or a Holder to insist upon strict adherence to any term of this Certificate of Designation on one or more occasions shall not be considered a waiver or deprive that party (or any other Holder) of the right thereafter to insist upon strict adherence to that term or any other term of this Certificate of Designation. Any waiver by the Corporation or a Holder must be in writing. Notwithstanding any provision in this Certificate of Designation to the contrary, any provision contained herein and any right of the Holders of Series A Preferred Stock granted hereunder may be waived or amended as to all shares of Series A Preferred Stock (and the Holders thereof) upon the written consent of the Holders of a majority of the shares of Series A Preferred Stock then outstanding, unless a higher percentage is required by the DGCL, in which case the written consent of the Holders of not less than such higher percentage shall be required. Any waiver or amendment effected in accordance with this Section 8(a) shall be binding on all the Holders of Series A Preferred Stock, and all of such party’s successors and permitted assigns, whether or not any such party, successor or assignee entered into or approved such waiver or amendment.

 

(b). Severability. If any provision of this Certificate of Designation is invalid, illegal or unenforceable, the balance of this Certificate of Designation shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law.

 

(c). Headings. The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designation and shall not be deemed to limit or affect any of the provisions hereof.

 

(d). Status of Converted Series A Preferred Stock. If any shares of Series A Preferred Stock shall be converted or redeemed by the Corporation, such shares shall resume the status of authorized but unissued shares of preferred stock and shall no longer be designated as Series A Preferred Stock.

 

********************

 

 

IN WITNESS WHEREOF, Bright Green Corporation has caused this Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock to be executed by its duly authorized officer this [__] day of September 2024.

 

	By:
	Name:	Gurvinder Singh
	Title:	Chief Executive Officer

 

[SIGNATURE PAGE TO CERTIFICATE OF DESIGNATION]

 

 

 

 

 

Exhibit 10.1

 

SECURED AMENDED AND RESTATED LINE OF CREDIT NOTE

 

$15,000,000.00

Amended and Restated as of September [__], 2024

 

FOR VALUE RECEIVED, BRIGHT GREEN CORPORATION, a Delaware corporation (the “Borrower”), promises to pay to Lynn Stockwell (the “Lender”), the principal amount of each loan made by the Lender to the Borrower or, if less, the total unpaid principal amount of all loans (each, a “Loan” and, collectively, the “Loans”) made to the Borrower by the Lender under this Secured Amended and Restated Line of Credit Note (as amended, restated, supplemented or otherwise modified from time to time in accordance with its terms, the “Note”), up to an aggregate principal amount of Fifteen Million and 00/100 Dollars ($15,000,000.00), on the Maturity Date (as defined below), together with interest at such rates and payable on such dates as set forth below. The Maturity Date may not be later than the Expiry Date as set forth below.

 

To secure the prompt payment to Lender of the amounts payable by Borrower under this Note (or by any note or notes which may be given in renewal or extension by Lender of all or any part of such indebtedness or which may amend or restate the terms pursuant to which such indebtedness is to be outstanding), Borrower will execute and deliver to Lender, within thirty (30) business days, that certain Mortgage, Assignment of Leases And Rents, Security Agreement And Fixture Filing, by and between Borrower and Lender, and granting security interest in favor of Lender in real property located at 1033 George Hanosh Blvd, Grants, NM 87020 (the “Security Instrument”), only if and after the Lender makes a new Loan of at least the Minimum Initial Loan Amount under the terms of this Note by transmitting such Loan in immediately available funds to a deposit account as directed by the Borrower, which funds shall be received no later than the second (2nd) Business Day (the “Funding Date”) following the date of this Note.

 

The Borrower acknowledges and agrees that, notwithstanding any provision of this Note, or any other Facility Document that may be entered into from time to time, the Lender has no obligation to make a Loan under the line of credit evidenced by this Note (the “Line of Credit”) and this Note does not create any contractual or other commitment to lend by the Lender. Any Loan made by the Lender hereunder shall mature and become due on the Maturity Date and the Lender has no commitment to convert or renew any such Loan or make a new Loan. This Note is executed and delivered by the Borrower to the Lender to evidence any Loans that the Lender may extend to the Borrower in the Lender’s sole discretion.

 

Requests for Loans shall be made in accordance with the procedures outlined in Section 2. The initial Loan made under the original Note dated June 5, 2022 was made in the principal amount of Three Million and 00/100 Dollars ($3,000,000.00). The Base Rate applicable to each Loan shall be as described in the definition of Base Rate below. Each Loan, if made, shall bear interest at the Interest Rate as described below. If the Base Rate becomes temporarily or permanently unavailable, it will be replaced in accordance with the provisions of Section 7.

 

 

Section 1. Definitions. As used in this Note, the following terms have the meaning specified below:

 

“$”, “USD” and “dollars” denote lawful money of the United States of America.

 

“Applicable Margin” shall mean two percent (2%).

 

“Base Rate” shall mean the Prime Rate as defined below.

 

“Borrower” has the meaning set forth in the first paragraph of this Note.

 

“Business Day” means a day on which commercial banks are authorized to be open for business in the City of New York.

 

“Capitalized Lease Obligations” mean, with respect to any Person, all rental obligations of such Person which, under GAAP, are or will be required to be capitalized on the books of such Person, in each case taken at the amount thereof accounted for as indebtedness in accordance with such principles.

 

“Certificate of Designation” means the Bright Green Corporation Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Voting Preferred Stock, to be filed by the Company with the Secretary of State of the State of Delaware, pursuant to the Delaware General Corporation Law, in the form attached hereto as Exhibit A.

 

“Change of Control” means the Lender shall at any time and for any reason no longer own at least 25% of the Equity Interests of the Borrower.

 

“Conversion Option” is defined in Section 5(a).

 

“Default Rate” means, with respect to any Loan, at the time of the Event of Default until the Maturity Date of such Loan, and from and after the Maturity Date of such Loan, a rate per annum equal to two percent (2%) above the Interest Rate for such Loan.

 

“Interest Rate” shall mean the Base Rate plus two percent (2%).

 

“Lender” is defined in the first paragraph of this Note.

 

“Electronic Note” is defined in Section 17.

 

“Equity Interests” of any Person means any and all shares, interests, rights to purchase, warrants, options, participation or other equivalents of or interest in (however designated) equity of such Person, including any common stock, preferred stock, any limited or general partnership interest and any limited liability company membership interest.

 

“Event of Default” means an event described in Section 9.

 

“Expiry Date” means the earlier to occur of (i) the later of (a) December 31, 2027, or if such day is not a Business Day, the immediately preceding Business Day, and (b) the expiration of any extension period granted by the Lender, or (ii) such earlier date as may be notified by Lender in accordance with Section 9.

 

“Facility Documents” means this Note and any other documents or instruments executed as security or collateral for, or a guarantee of, the Loans, or in connection with or as support of, any of the foregoing, whether by the Borrower or a Third Party, and any updates or renewals thereof.

 

“GAAP” means generally accepted accounting principles in the United States as in effect from time to time.

 

 

“Governing Law” means the law of the State of New York.

 

“Governmental Authority” means the government of the United States of America, any other nation or any political subdivision of the foregoing, whether state, provincial or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

 

“Indebtedness” means, as to any Person, without duplication, (a) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services, (b) the maximum amount available to be drawn or paid under all letters of credit, bankers’ acceptances, bank guaranties, surety and appeal bonds and similar obligations issued for the account of such Person and all unpaid drawings and unreimbursed payments in respect of such letters of credit, bankers’ acceptances, bank guaranties, surety and appeal bonds and similar obligations, (c) all indebtedness of the types described in clause (a), (b), (d) and (e) of this definition secured by any lien on any property owned by such Person, whether or not such indebtedness has been assumed by such Person (provided that, if the Person has not assumed or otherwise become liable in respect of such indebtedness, such indebtedness shall be deemed to be in an amount equal to the fair market value of the property to which such lien relates), (d) all Capitalized Lease Obligations of such Person and (e) all obligations of such Person to pay a specified purchase price for goods or services, whether or not delivered or accepted, i.e., take-or-pay and similar obligations. Notwithstanding the foregoing, Indebtedness shall not include trade payables, accrued expenses and deferred tax and other credits incurred by any Person in accordance with customary practices and in the ordinary course of business of such Person.

 

“Interest Payment Date” means the Maturity Date.

 

“Line Amount” as of September 16, 2024 means $15,000,000.00.

 

“Line of Credit” is defined in the second paragraph of this Note.

 

“Loan” and “Loans” are defined in the first paragraph of this Note.

 

“Maturity Date” means the date that is three (3) years from the date hereof, or the calendar day immediately preceding such 3-year anniversary date if such date is not a calendar day. After Conversion Option is exercised, Maturity Date shall mean the date that is twelve (12) months from the date the Conversion Option is exercised, or the calendar day immediately preceding such 12-month anniversary date if such date is not a calendar day.

 

“Minimum Initial Loan Amount” means $2,500,000.00.

 

“Paper-Based Note” is defined in Section 17.

 

“Person” means any individual, partnership, joint venture, firm, corporation, association, limited liability company, trust or other enterprise or any Governmental Authority.

 

“Prime Rate” means the rate of interest per annum announced from time to time by JPMorgan Chase Bank as its prime rate. Each change in the Prime Rate shall be effective from and including the date the change is announced as being effective. The Prime Rate is a reference rate and may not be JPMorgan Chase’s lowest rate. If the Prime Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Note.

 

“Property” means the real property and improvements thereon, including, without limitation, the land, buildings, fixtures, equipment and machinery located at 1033 George Hanosh Blvd, Grants, NM 87020.

 

 

“Replacement Base Rate” means a replacement for the Base Rate as determined by the Lender in consultation with the Borrower, and any overnight rate, forward-looking term rate, and/or compounded rate that is based on or derived therefrom; or

 

If the Replacement Base Rate would be less than zero, the Replacement Base Rate will be deemed to be zero for purposes of this Note.

 

“Replacement Base Rate Changes” is defined in Section 7(b).

 

“Replacement Event” is defined in Section 7(b).

 

“Series A Preferred Stock” is defined in the Certificate of Designation.

 

“Third Party” means any party liable with respect to, or otherwise granting support for, this Note, whether by guarantee, subordination, grant of security or otherwise, including, without limitation, any party that is identified as a “Pledgor” or “Guarantor” in the Loan Terms Statement.

 

Section 2. Requests for Loans, Conversions and Renewals.

 

(a) Requests for a Loan must be received not later than noon, New York City time, no less than ten (10) Business Days prior to the date of the proposed borrowing. Proceeds of any Loan extended under this Note shall be credited to an account as directed by the Borrower to the extent permitted by the Lender and subject to such conditions as the Lender may require in its sole discretion; provided, that the Lender is entitled to rely on information provided by the Borrower without investigation.

 

(b) Subject to such conditions and procedures as the Lender may require in its sole discretion, requests described above can be made by telephone, in writing, electronically or through an Internet portal provided by the Lender. Any request shall be irrevocable and specify: (i) in the case of a Loan request, the amount requested and the borrowing date of such requested Loan, which shall be a Business Day.

 

(e) The Borrower acknowledges that the Lender will use reasonable procedures to determine that a request described in this Section 2 was provided by the Borrower or someone the Borrower authorized. The Borrower agrees that it shall be bound by any such request or notice that the Lender, in good faith, believes was provided by the Borrower or someone the Borrower authorized, regardless of how such request or notice was transmitted to the Lender and the Lender will not be liable for any loss, cost or expense for acting on such request or notice.

 

Section 3. Interest; Repayment of Loans.

 

(a) The principal amount of each Loan outstanding under this Note, together with all accrued interest thereon, shall be due and payable on the Maturity Date.

 

(b) The Borrower promises to pay interest on the Maturity Date on the unpaid balance of the principal amount of each Loan that accrues from the date such Loan is made until such Loan, together with accrued interest thereon, is repaid in full. After the occurrence of an Event of Default, the Lender may, at its option, by notice to the Borrower (which notice may be revoked at the option of the Lender), declare that all Loans shall bear interest at the Default Rate from and including the date of such Event of Default until such Loans are paid in full, such interest to be payable on demand.

 

 

(c) All interest hereunder shall be computed on the basis of a year of 365 days (or 366 days in a leap year) and, in each case, shall be payable for the actual number of days elapsed (including the first day, but excluding the last day).

 

(d) All payments (including any prepayments) hereunder shall be made in lawful money of the United States and in immediately available funds. Any extension of time for the payment of the principal of this Note resulting from the due date falling on a non-Business Day shall be included in the computation of interest.

 

Section 4. Prepayments.

 

(a) The Borrower shall have the right at any time and from time to time to prepay any Loan, in whole or in part, subject to prior notice in accordance with clause (b) of this Section and, if applicable, payment of any break funding expenses under clause (c) of this Section.

 

(b) The Borrower shall notify the Lender of any prepayment under this Section, (i) not later than noon, New York City time, not less than three (3) Business Days before the date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date, which shall be a Business Day, and the principal amount of each Loan or portion thereof to be prepaid. Subject to such conditions and procedures as the Lender may require from time to time in its sole discretion, notices can be provided by telephone, in writing, electronically or through an Internet portal provided by the Lender. Each prepayment of a Loan shall be accompanied by accrued interest and, if applicable, break funding payments pursuant to clause (c).

 

Section 5. Series A Preferred Stock.

 

(a) Conversion Option. At the time (i) Lender makes a new Loan of at least the Minimum Initial Loan Amount under the terms of this Note by transmitting such Loan in immediately available funds to a deposit account as directed by the Borrower, which funds shall be received no later than the Funding Date following the date of this Note and (ii) Borrower is unable to pay to Lender all outstanding principal and accrued interest of the Note by December 31, 2024, Lender automatically converts all outstanding principal and accrued interest as of December 31, 2024, up to Four Million and 00/100 Dollars ($4,000,000), under the Note into shares of Borrower’s Series A Preferred Stock pursuant to the Certificate of Designation (the “Maximum Conversion Amount”). For the avoidance of doubt, this Conversion Option may only be exercised once, and shall be subject to the limitations set forth in the Certificate of Designation. In addition to the foregoing, provided the Minimum Initial Loan Amount is received by the Company on or before the Funding Date, the Note shall be convertible into shares of Series A Preferred Stock up to the Maximum Conversion Amount, at the discretion of Lender, as set forth in the Certificate of Designation.

 

(b) Rights of Series A Preferred Stock. The Series A Preferred Stock shall have the rights and preferences set forth in the Certificate of Designation. Provided the Minimum Initial Loan is received by the Company on or before the Funding Date, the Company shall cause the Certificate of Designation to be filed with the Secretary of State of the State of Delaware, no later than the second (2nd) Business Day thereafter.

 

 

Section 6. Collateral. Only after the Lender makes a new Loan of at least the Minimum Initial Loan Amount under the terms of this Note by transmitting such Loan in immediately available funds to a deposit account as directed by the Borrower, which funds shall be received no later than the Funding Date following the date of this Note, will the outstanding principal balance and accrued interest and new Loans under the Note be secured, pursuant to the Security Instrument, by (i) a first lien mortgage on Borrower’s fee interest in the Property and a first priority assignment of leases and rents, (ii) a first priority security interest in all accounts receivable of Borrower, (iii) an assignment of all contracts, licenses, permits, plans, specifications and other documentation with respect to the Property, and (iv) such other collateral as is customary for a loan of this type, including additional real property if the acquisition of such property occurs while this Note is outstanding.

 

Section 7. Base Rate Unavailability.

 

The Lender will have the right, from time to time, by notice to the Borrower, to make any technical, administrative, or operational changes (including, without limitation, (I) changes to the definitions of Business Day and Interest Payment Date, (II) timing and frequency of determining rates and making payments of interest, (III) inclusion of compounding methodologies and conventions if applicable, and (IV) other administrative matters (collectively, “Replacement Base Rate Changes”)) that the Lender decides in its reasonable discretion may be appropriate to reflect the adoption and implementation of a Replacement Base Rate. The Replacement Base Rate, together with all such Replacement Base Rate Changes as specified in any notice, shall become effective on the date specified by the Lender in the notice, without any further action or consent of the Borrower.

 

Any determination, decision, or election that may be made by the Lender, including any conclusion that it is not possible to determine an interest rate, any determination with respect to a rate or adjustment or the occurrence or non-occurrence of an event, circumstance or date, and any decision to take or refrain from taking any action, will be conclusive and binding absent manifest error and may be made in its sole discretion and without consent from the Borrower.

 

Section 8. Representations and Warranties. The Borrower represents and warrants as of the date of this Note, and as of the date of any request for a Loan, that:

 

(a) the Facility Documents constitute valid, enforceable and binding agreements, except as may be limited by bankruptcy, insolvency, or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity;

 

(b) the execution, delivery and performance by the Borrower of the Facility Documents, and the use of the proceeds of any of the Loans, do not (i) conflict with any agreement by which it is bound or result in the creation of any lien, charge or encumbrance upon the property or assets of the Borrower thereunder (other than pursuant to any Facility Documents) to which the Borrower is a party or is bound or by which its properties may be bound or affected, (ii) violate any provision of any law, rule, regulation (including, without limitation, Regulation U of the Federal Reserve Board), order, writ, judgment or injunction presently in effect having applicability to the Borrower, or (iii) require the consent or approval of any individual, business, governmental authority or other entity; and

 

(c) no litigation, claim, investigation, administrative proceeding or similar action is pending or, to the best of the Borrower’s knowledge, threatened (i) involving or affecting any material part of the Borrower’s assets, any of the Facility Document collateral, or the transactions contemplated in the Facility Documents or (ii) against the Borrower that, if adversely determined, is likely to have a material adverse effect on the condition of the Borrower. There are currently no material judgments entered against the Borrower and the Borrower is not in default with respect to any judgment, writ, injunction or order of any court or other judicial authority, which default is likely to have or has had a material adverse effect on the condition of the Borrower.

 

 

Section 9. Events of Default. If any one or more of the following events shall occur (each an “Event of Default”):

 

(a) the Borrower fails to pay the principal of, or interest on, this Note, or any other amount payable under this Note, as and when due and payable;

 

(b) the Borrower or any Third Party (i) fails to observe or perform any other term or agreement of any of the Facility Documents; (ii) makes any materially incorrect or misleading representation to the Lender; (iii) fails to pay when due (whether by scheduled maturity, acceleration, demand or otherwise, and after giving effect to any applicable notice and/or cure periods) any of its indebtedness (including, but not limited to, indebtedness for borrowed money) in excess of $250,000 owing to parties other than the Lender or its affiliates or any interest or premium thereon when due; or (iv) fails to comply with, or perform under any agreement (other than the Facility Documents), now or hereafter in effect, with the Lender or any affiliate of the Lender;

 

(c) the Borrower or any Third Party: (i) becomes insolvent or unable to pay its debts as they become due, (ii) makes an assignment for the benefit of creditors, (iii) commences any proceeding under any bankruptcy, reorganization, liquidation, insolvency or similar laws, (iv) has had any such petition filed, or any such proceeding has been commenced against it, in which an adjudication is made or order for relief is entered or which remains undismissed for a period of sixty (60) days, (v) has had a receiver, custodian or trustee appointed for all or a substantial part of its property, or (vi) takes any action effectuating, approving or consenting to any of the events described in clauses (i) through (v);

 

(d) the Borrower or any Third Party dissolves or for any reason ceases to be in existence or merges or consolidates, or if there is a change in the direct or indirect beneficial ownership of the Borrower or any Third Party;

 

(f) the Borrower or any Third Party is involved in a proceeding which is likely to result in a forfeiture of all or a substantial part of its assets or a judgment in excess of $5,000,000 is entered against the Borrower or any Third Party;

 

(g) there is, in the opinion of the Lender, a material adverse change in the business or financial condition of the Borrower or any Third Party;

 

(h) the validity or enforceability of any Facility Document is contested by any party to the Facility Document, or such signatory to the Facility Document denies it has any further liability or obligation under the Facility Document;

 

(i) the Borrower fails to furnish any financial information that the Lender may reasonably request from time to time promptly upon the Lender’s request;

 

(j) a Change of Control occurs; or

 

(k) the Borrower defaults in the due performance or observance by it of the covenant contained in Section 16, and such default continues unremedied for a period of thirty (30) calendar days after the occurrence thereof.

 

THEN, the Lender may, by notice to the Borrower, declare this Note to be due and payable, without presentment, demand, protest, notice of acceleration or intention to accelerate or further notice of any kind, all of which are expressly waived, provided that in the case of an Event of Default described in clause (c) above, this Note shall be immediately due and payable without notice.

 

Section 10. Expenses. The Borrower will pay to the Lender all reasonable costs and expenses (including reasonable attorneys’ fees and legal expenses) incurred by the Lender in connection with the preparation or modification of the Facility Documents and performance thereof and the exercise of any of the Lender’s rights, remedies or obligations under the Facility Documents.

 

 

Section 11. Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflict of laws principles, and with the laws of the United States of America as applicable.

 

Section 12. Jurisdiction. To the extent not prohibited, the Borrower: (i) agrees that all claims related to this Note may be adjudicated by a state or federal court sitting in New York County, (ii) agrees that any proceeding brought against the Lender shall be brought only in a state or federal court in New York County, and (iii) agrees that the Lender may comply with service of process requirements in any such proceeding by mailing (via prepaid registered or certified U.S. mail) documents to be served in accordance with the notice provisions of Section 14. The Borrower agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in any other jurisdiction and waives any defense on the basis of an inconvenient forum. Nothing herein shall affect the right of the Lender to serve legal process in any other manner permitted by law or affect the right of the Lender to bring any action or proceeding against the Borrower or its property in the courts of any other jurisdiction.

 

Section 13. WAIVER OF JURY TRIAL. THE BORROWER AND THE LENDER EACH WAIVE ANY RIGHT TO JURY TRIAL.

 

Section 14. Miscellaneous.

 

(a) The provisions of this Note are intended to be severable. If any provision of this Note is held invalid or unenforceable in whole or in part in any jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without affecting the validity or enforceability thereof in any other jurisdiction or the remaining provisions thereof in any jurisdiction.

 

(b) Except for changes the parties have agreed may be made by the Lender in the Lender’s discretion without consultation with the Borrower, no amendment or modification of any provision of this Note shall be effective unless the same shall be executed by the Borrower and the Lender. A waiver by the Lender of a provision of this Note shall not constitute a waiver of the Lender’s right to otherwise demand strict compliance with that provision or any other provision of this Note. Whenever the consent of the Lender is required under this Note, the granting of such consent shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the Lender’s sole discretion. The Lender shall not be deemed to have waived any rights under this Note unless such waiver is in writing and signed by the Lender.

 

(c) No delay on the part of the Lender in the exercise of any right or remedy waives that right or remedy. No single or partial exercise by the Lender of any right or remedy precludes any other future exercise of it or the exercise of any other right or remedy. The rights and remedies in this Note are cumulative and not exclusive of any rights and remedies which the Lender may have under law or under other agreements or arrangements with the Borrower. The Borrower waives presentment, notice of dishonor, protest and any other notice or formality with respect to this Note except for any notices expressly required by this Note.

 

(d) If the term “Borrower” is or becomes defined to include more than one party, then the obligations, representations and warranties of the Borrower hereunder shall be joint and several regardless of any change in business relations, divorce, legal separation or other legal proceedings and regardless of any agreement that may affect liabilities between or among such parties, and the Lender shall be entitled to act on notices and requests from any one of the parties without the consent of the other party(ies).

 

 

(e) The obligations of the Borrower under this Note shall be subject to the limitation that payments of interest shall not be required to the extent that receipt thereof would be contrary to provisions of law applicable to the Lender limiting rates of interest which may be charged or collected by the Lender.

 

(f) Except as otherwise permitted in this Note, notices (including, without limitation, interest statements) shall be addressed to the Lender as set forth in the Lender’s signature block below, and to the Borrower addressed as set forth in the Borrower’s signature block below, or any email address that the Borrower has provided to the Lender as the Borrower’s email address (or at such other number or address as shall be designated by one party to the other by telephone or in the manner provided for in this Section) and either given electronically or in writing by hand, overnight courier, certified or registered mail, or regular mail. Notices sent by hand, overnight courier, certified or registered mail, or regular mail shall be deemed to have been given when delivered. Notices sent to an email address shall be deemed received when sent, provided, that, if such notice is not sent during normal business hours, such notice shall be deemed to have been sent and received at the opening of business on the next Business Day. All notices by the Lender properly addressed to the Borrower shall be deemed to have been personally delivered to the Borrower whether actually received or not.

 

(g) Reserved.

 

(h) Each reference to the Lender shall be deemed to include its successors, endorsees and assigns, in whose favor the provisions hereof shall inure. Each reference to the Borrower shall be deemed to include its successors and assigns, all of whom shall be bound by the provisions hereof. This Note shall be binding on the Borrower and shall inure to the benefit of the Lender, except that the Borrower may not delegate or assign any of its rights or obligations hereunder without the prior written consent of the Lender.

 

(i) This Note, any amendment to this Note and any agreement, notice or other communication required by this Note to be “written” or “in writing” may be executed in any number of counterparts, including counterparts that are executed on paper and counterparts that are electronic records and are executed using electronic signatures generated through the electronic execution process provided by the Lender or such other electronic execution process acceptable to the Lender in its sole discretion. Each counterpart of such document, when so executed, shall be deemed an original but all such counterparts shall constitute one and the same document. Delivery of a manually executed counterpart of a signature page of such document by emailed PDF or JPEG from the Borrower’s e-mail address on file with the Lender, or any other electronic means acceptable to the Lender in its sole discretion that reproduces an image of such manually executed signature page, shall each be effective as delivery of a manually executed counterpart of such document; provided, that, the Lender, in its sole discretion, can require subsequent delivery of the manually executed counterpart of a signature page.

 

(j) The date, amount, Base Rate of, Maturity Date of, Applicable Margin of, and the Interest Rate with respect to, each Loan evidenced hereby, and all payments of principal and/or interest thereof shall, in each case, be evidenced by records maintained by the Lender in the ordinary course of business and such records shall be presumptively correct absent manifest error and any failure to so record or any error in doing so shall not limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to any Loan made hereunder.

 

Section 15. Use of Proceeds. The Borrower agrees that it will not, directly or indirectly, use the proceeds of any Loan under this Note or make available such proceeds to any person or entity: (i) to fund any activities or business of or with any person or entity, or in any country or territory, that, at the time of such funding is the subject of any economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by the U.S. government, including the U.S. Department of the Treasury’s Office of Foreign Assets Control or the U.S. Department of State or (ii) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money or anything else of value, to any person in violation of any applicable laws, rules, or regulations relating to bribery or corruption.

 

 

Section 16. Indebtedness Covenant. The Borrower hereby covenants and agrees that on and after the date hereof and until the outstanding principal amount of the Note (together with interest thereon), fees and all of the Borrower’s other obligations incurred hereunder, are paid in full, the Borrower will not contract, create, incur assume or suffer to exist any Indebtedness other than the Indebtedness incurred pursuant to this Note.

 

Section 17. Conversion From Electronic Note to Paper-Based Note. If this Note is executed electronically (“Electronic Note”), the Lender and any person to whom this Electronic Note is later transferred shall have the right to convert this Electronic Note at any time into a paper-based Note (“Paper-Based Note”). In the event this Electronic Note is converted into a Paper-Based Note:

 

(a) the Paper-Based Note will be an effective, enforceable and valid instrument;

 

(b) the execution of this Electronic Note will be deemed issuance and delivery of the Paper-Based Note;

 

(c) the printing of the representation of the electronic signature for the Borrower upon the Paper-Based Note from the system in which the Electronic Note is stored will be deemed the original signature for the Borrower on the Paper-Based Note and will serve to indicate the Borrower’s present intention to authenticate the Paper-Based Note;

 

(d) the Paper-Based Note will be a valid original writing for all legal purposes; and

 

(e) upon conversion to a Paper-Based Note, the Borrower’s obligations in the Electronic Note shall automatically transfer to, and be contained in, the Paper-Based Note, and the Borrower intends to be bound by such obligations.

 

Section 18. Execution and Use of Electronic Records and Signatures. If the Borrower has received and reviewed this Note electronically, then the Borrower agrees that this Note may be in the form of an electronic record and may be executed using electronic signatures generated through the electronic execution process provided by the Lender or such other electronic execution process acceptable to the Lender in its sole discretion. Any electronic signature on or associated with this Note and accepted by the Lender shall be valid and binding on the signer to the same extent as a manual signature and upon application thereof, this Note will constitute a legal, valid, and binding obligation enforceable in accordance with its terms to the same extent as if manually executed. Notwithstanding any other provision of this Note, at the Lender’s option and in the Lender’s sole discretion, any agreement, amendment, notice or other communication required by this Note to be “written” or “in writing” may be in the form of an electronic record and may be executed using electronic signatures generated through the electronic execution process provided by the Lender or such other electronic execution process acceptable to the Lender in its sole discretion.

 

Section 19. Amendment and Restatement. Except as amended herein, all terms and conditions of the Amended and Restated Line of Credit Note dated November 14, 2022 (the “Existing Note”) remain in full force and effect. This is an amendment to the Existing Note. It is not a novation or other modification of any kind.

 

NO FURTHER TEXT; SIGNATURE PAGE FOLLOWS

 

 

BRIGHT GREEN CORPORATION, BORROWER
By:	/s/ Gurvinder Singh
Name:	Gurvinder Singh
Title:	Chief Executive Officer
Borrower’s Address:
401 East Las Olas Blvd Suite 1400
Fort Lauderdale, FL 33301
United States
LYNN STOCKWELL, LENDER
By:	/s/ Lynn Stockwell
Name:	Lynn Stockwell
Lender’s Address:
701 N Fort Lauderdale Beach Blvd
Fort Lauderdale, Fl. 33304

 

 

EXHIBIT A

 

[Attached hereto]

 

 

v3.24.3

Cover	Sep. 16, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Sep. 16, 2024
Current Fiscal Year End Date	--12-31
Entity File Number	001-41395
Entity Registrant Name	BRIGHT GREEN CORPORATION
Entity Central Index Key	0001886799
Entity Tax Identification Number	83-4600841
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	1033 George Hanosh Boulevard
Entity Address, City or Town	Grants
Entity Address, State or Province	NM
Entity Address, Postal Zip Code	87020
City Area Code	(833)
Local Phone Number	658-1799
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Trading Symbol	BGXX
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false

---