Amendment: SEC Form SC 13D/A filed by Maxeon Solar Technologies Ltd.

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Pursuant to the New 1L Notes Purchase Agreement, (i) the Issuer agreed to sell and TZS agreed to purchase, on the terms and subject to the conditions set forth therein, $97,500,000 aggregate principal amount of the Issuer’s new 9.00% Convertible First Lien Senior Secured Notes due 2029 (the “New 1L Notes”), for an aggregate purchase price of $97,500,000, which consists of (x) $70,000,000 to be paid by TZS in the form of cash consideration for its purchase of $70,000,000 principal amount of New 1L Notes, (y) $25,000,000 in aggregate principal amount of Additional 1L Notes to be tendered by TZS to the Issuer in exchange for $25,000,000 principal amount of New 1L Notes and (z) $2,500,000, which amount is being paid by TZS on behalf of the Issuer to a global consulting firm for services rendered to the Issuer, and (ii) the Issuer agreed to issue to TZS a warrant (the “TZS Warrant”) for no additional consideration granting TZS the right to purchase certain Ordinary Shares of the Issuer under certain circumstances described below.

Once issued, the New 1L Notes will be convertible, at the option of the holder, from and after the date of issuance until the fifth scheduled trading day immediately preceding the maturity date of the New 1L Notes, in accordance with the terms and conditions to be set forth in the indenture governing the New 1L Notes (the “New 1L Notes Indenture”). Upon the conversion of any of the New 1L Notes, the Company will have the option to settle such conversion by way of cash and/or newly issued Ordinary Shares.  The initial conversion price will be $1.6423 per share, subject to adjustments to be set forth in the New 1L Notes Indenture (the “New 1L Notes Conversion Price”). The New 1L Notes Conversion Price shall be reset based on the Forward Purchase VWAP, if the Forward Purchase VWAP is lower than the initial conversion price.  In the event the $97,500,000 principal amount of New 1L Notes were to be fully converted into Ordinary Shares at the initial New 1L Notes Conversion Price in accordance with the terms and conditions of the New 1L Notes Indenture, the New 1L Notes would be converted into a total of 59,367,960 Ordinary Shares.

The TZS Warrant will have an initial exercise price of $0.01 per share. The TZS Warrant will be exercisable after the date of issuance upon the occurrence of (a) one or more of the holders of the 2L Notes converting all or a portion of such 2L Notes into Ordinary Shares or (b) the Issuer exercising its option under the indenture governing the 2L Notes to cause the Optional Exchange of the Tranche A portion of the 2L Notes into Ordinary Shares (each, an “Exercisability Event”). Following the occurrence of any Exercisability Event, TZS would be entitled to purchase a number of Ordinary Shares under the TZS Warrant such that TZS maintains an ownership of 23.53% of the equity interests of the Company after giving effect to the relevant Exercisability Event and the potential issuance under the TZS Warrant. The TZS Warrant will expire on the later of (a) the closing of the Forward Purchase Investment or (b) five Business Days after the consummation of the Optional Exchange, and only upon the occurrence of any conversion of 2L Notes and/or the Optional Exchange.  The issuance of the New 1L Notes and the TZS Warrant is expected to take place in June 2024, or such other time and place as the Issuer and TZS may agree in writing, subject to the satisfaction of certain conditions set forth in the New 1L Notes Purchase Agreement.

Pursuant to the A&R Option Agreement, the Issuer and TZS amended and restated the Option Agreement originally entered into on August 26, 2020 in order for TZS to have a right to purchase such number of Ordinary Shares as may be necessary to maintain its percentage ownership of Ordinary Shares of the Issuer to provide for anti-dilution protection against (1)(i) any conversion of the 2L Notes to be issued by the Issuer and (ii) any exercise of certain warrants to be issued to holders of the 2L Notes entitling such holders to purchase Ordinary Shares, and (2) any conversion of 2025 Notes that remain outstanding after the 2L Notes are issued.

In connection with the transactions described above, the Issuer advised TZS that the Issuer proposes to amend the terms of the Existing 1L Notes (such amended Existing 1L Notes, the “Amended 1L Notes”) and the indenture governing the Existing 1L Notes (the “1L Notes Indenture”) in order to, among other things, (a) extend the maturity date of the Existing 1L Notes from August 17, 2027 to August 17, 2029; (b) amend the interest rate of the Existing 1L Notes from 7.50% per annum to (i) 8.50% per annum, if the Company elects to pay the interest in cash and payment-in-kind interest or (ii) 7.50% per annum, if the Company elects to pay the interest solely in cash; (c) change the per share conversion price of the Existing 1L Notes to equal the New 1L Notes Conversion Price, subject to reset based on the Forward Purchase VWAP, if the Forward Purchase VWAP is lower than such conversion price; and (d) amend certain covenants of the Existing 1L Notes.  These amendments would take effect concurrently with the consummation of TZS’s purchase of the New 1L Notes and the TZS Warrant. In the event the $207,000,000 principal amount of Amended 1L Notes that will be outstanding following these amendments were to be fully converted into Ordinary Shares at the initial New 1L Notes Conversion Price in accordance with the terms and conditions of the amended 1L Notes Indenture, the Amended 1L Notes would be converted into a total of 126,042,745 Ordinary Shares.  As holder of the Existing 1L Notes, TZS has consented to such proposed amendments to the Existing 1L Notes and the 1L Notes Indenture.