Applied Digital : Material Agreement - Form 8-K

Item 1.01 Entry into a Material Definitive Agreement.

Dealer Manager Agreement

On May 16, 2024, Applied Digital Corporation (the "Company") entered into a Dealer Manager Agreement (the "Dealer Manager Agreement") with Preferred Capital Securities, LLC (the "Dealer Manager"), pursuant to which the Dealer Manager has agreed to serve as the Company's agent and dealer manager for the Company's offering (the "Offering") of up to 2,000,000 shares of its Series E Redeemable Preferred Stock, par value $0.001 (the "Series E Preferred Stock").

The Series E Preferred Stock is registered with the Securities and Exchange Commission pursuant to a shelf registration statement on Form S-3 (File No. 333-279155) under the Securities Act of 1933, as amended (the "Registration Statement"), and will be offered and sold pursuant to a prospectus supplement dated May 16, 2024, and a base prospectus dated May 16, 2024, relating to the Registration Statement (collectively, the "Prospectus").

The Dealer Manager Agreement requires the Dealer Manager to use its reasonable best efforts to sell shares of the Series E Preferred Stock offered in the Offering pursuant to a subscription agreement (the "Subscription Agreement"). Each share of Series E Preferred Stock will be sold a public offering price of $25.00 per share (the "Stated Value"). Subject to the terms, conditions and limitations described in the Dealer Manager Agreement, the Company will pay to the Dealer Manager a dealer manager fee in an amount equal to 2% of the Stated Value per share of Series E Preferred Stock sold in the Offering and a selling commission of up to 6% of the Stated Value per share of Series E Preferred Stock sold in the Offering. The Company may pay reduced selling commissions or may eliminate commissions or certain sales of the Series E Preferred Stock, including the reduction or elimination of selling commissions in accordance with, and on the terms set forth in, the Prospectus. The Company expects the Dealer Manager to authorize participating broker-dealers that are members of FINRA to sell the Series E Preferred Stock. The Dealer Manager may reallow all or a portion of its selling commission attributable to a participating broker-dealer. The Dealer Manager may also reallow a portion of its dealer manager fee earned on the proceeds raised by a participating broker-dealer, to such participating broker-dealer as a marketing fee.

Pursuant to the Dealer Manager Agreement, the Company has agreed to indemnify the Dealer Manager and participating broker-dealers, and the Dealer Manager has agreed to indemnify the Company against certain losses, claims, damages and liabilities, including, but not limited to, those arising out of (i) untrue statements of a material fact contained in the Registration Statement, Prospectus or any supplement thereto relating to the Offering or (ii) the omission or alleged omission to state a material fact required to be stated in the Registration Statement, Prospectus or any supplement thereto relating to the Offering.

Services Agreement

On May 16, 2024, the Company entered into a Services Agreement (the "Services Agreement") with Preferred Shareholder Services, LLC ("PSS"), an affiliate of the Dealer Manager, pursuant to which PSS will provide certain post-Offering support services to the Company relating to the Series E Preferred Stock. The Company is responsible for payments due under the Services Agreement based on the number of shares of Series E Preferred Stock held in each investor account. The services to be provided by PSS include, among other things, distributing correspondence to holders of Series E Preferred Stock processing redemption requests from holders of Series E Preferred Stock and assistance with recordkeeping.

The foregoing descriptions of the Dealer Manager Agreement and the Services Agreement are only summaries and are qualified in their entirety by reference to the full text of the Dealer Manager Agreement and the Services Agreement, respectively, copies of each of which are filed as Exhibit 1.1 and 10.1, respectively, to this Current Report on Form 8-K and incorporated herein by reference.

In connection with the Offering, the Company is also filing a form of subscription agreement as Exhibit 4.1 to this Current Report on Form 8-K and incorporated herein by reference.

A copy of the legal opinion and consent of Snell & Wilmer L.L.P. relating to the shares of Series E Preferred Stock being offered is attached hereto as Exhibit 5.1.