Item 1.01 Entry into a Material Definitive Agreement
On January 27, 2023, Marathon Digital Holdings, Inc. (the "Company") and FS
Innovation, LLC ("FSI") entered into a Shareholders' Agreement (the "Agreement")
regarding formation of an Abu Dhabi Global Markets company (the "ADGM Entity"),
whose purpose shall be to jointly (a) establish and operate one or more mining
facilities for digital assets; and (b) mine digital assets (collectively, the
"Business"). The initial project by the ADGM Entity shall consist of two digital
asset mining sites comprising 250 MW in Abu Dhabi, and the initial equity
ownership in the ADGM Entity shall be 80% FSI and 20% the Company, and capital
contributions will be made, subject to the satisfaction or waiver of certain
conditions, during the 2023 development period in those proportions, consisting
of both cash and in kind, in amounts of approximately $406 million in aggregate.
FSI will appoint four directors to the board of the ADGM Entity, and the Company
will appoint one director.
Unless otherwise not permitted by applicable law, the digital assets mined by
the ADGM Entity will be distributed to the Company and FSI twice a month in
proportion to their respective equity interests in the ADGM Entity. There are
market provisions in the Agreement with respect to financial and tax matters.
The Agreement shall terminate at the earlier of the mutual written agreement of
the parties, winding up of the ADGM Entity or the ownership by a shareholder of
all of the outstanding equity interests in the ADGM Entity. The Agreement
contains market terms on transfer of shares by a shareholder, pre-emptive rights
and certain tag along and drag along rights upon a sale of the ADGM Entity.
Furthermore, there are five year restrictive covenants which, inter alia,
prevent Marathon from competing in the UAE with the Business or with the
business of FSI or any of certain related parties and prevent FSI from competing
in the U.S. with the business of Marathon.
Item 9.01 Exhibits
104 Inline XBRL
FORWARD-LOOKING STATEMENTS
This Form 8-K and other reports filed by Registrant from time to time with the
Securities and Exchange Commission (collectively, the "Filings") contain or may
contain forward-looking statements and information that are based upon beliefs
of, and information currently available to, Registrant's management as well as
estimates and assumptions made by Registrant's management. When used in the
Filings the words "anticipate," "believe," "estimate," "expect," "future,"
"intend," "plan" or the negative of these terms and similar expressions as they
relate to Registrant or Registrant's management identify forward-looking
statements. Such statements reflect the current view of Registrant with respect
to future events and are subject to risks, uncertainties, assumptions and other
factors relating to Registrant's industry, Registrant's operations and results
of operations and any businesses that may be acquired by Registrant. Should one
or more of these risks or uncertainties materialize, or should the underlying
assumptions prove incorrect, actual results may differ significantly from those
anticipated, believed, estimated, expected, intended or planned.
Although Registrant believes that the expectations reflected in the
forward-looking statements are reasonable, Registrant cannot guarantee future
results, levels of activity, performance or achievements. Except as required by
applicable law, including the securities laws of the United States, Registrant
does not intend to update any of the forward-looking statements to conform these
statements to actual results.
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