Document:

Exhibit 10.2

 

EQUIPMENT PURCHASE AND SALE AGREEMENT

 

THIS EQUIPMENT PURCHASE
AND SALE AGREEMENT (together with all Schedules and Exhibits hereto which are incorporated herein by reference, this “Agreement”),
dated as of September 8, 2022 (the “Effective Date”), is entered into by and between CleanSpark
GLP, LLC, a Georgia limited liability company, with its mailing address at 2380 Godby Road, College Park, Georgia 30349
(“Buyer”), and COSMOS INFRASTRUCTURE, LLC, a Delaware limited liability company, with an address at 2015 George
Lyons Parkway, Sandersville, Georgia 31082 (“Seller”) and MAWSON INFRASTRUCTURE GROUP, INC., a Delaware corporation
with its address at Level 5 97 Pacific Highway, North Sydney NSW 2060 (“MIG”).

RECITALS:

 

WHEREAS, CSRE Properties
Sandersville, LLC, a Georgia limited liability company, CleanSpark, Inc., a Nevada corporation, both affiliates of Buyer, and Luna Squares,
LLC, f/k/a Innovative Property Management, LLC, a Delaware limited liability company and an affiliate of Seller, have entered into a Purchase
and Sale Agreement (“Land Purchase Agreement”) on August 31, 2022; and

 

WHEREAS, as part of
the Land Purchase Agreement, it is contemplated that Buyer shall purchase certain of Seller’s Bitcoin mining equipment and other
assets in addition to the Land Purchase Agreement on the terms and conditions of this Agreement; and

 

WHEREAS, Seller desires
to sell such assets to Buyer on the terms and conditions of this Agreement.

 

NOW, THEREFORE, for
and in consideration of the mutual promises and covenants herein contained, and for other good and valuable consideration, the receipt
and sufficiency are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

 

Article
I

description AND delivery OF ASSETS

 

1.1   Purchased
Assets. Subject to the terms of this Agreement, Buyer agrees to purchase the assets from Seller that are listed on Schedule 1 (“Purchased
Assets”).

 

1.2   Delivery
of Purchased Assets. Buyer shall take possession of the Purchased Assets at 2015 George Lyons Parkway, Sandersville, Washington County,
Georgia 31082, upon the Closing (as defined in Section 3.2 below).

 

1.3 Land Purchase Agreement. The
consummation of this Agreement is subject to the execution, delivery and consummation of the transactions contemplated by the Land Purchase
Agreement. This Agreement may only be terminated, if the transactions contemplated by the Land Purchase
Agreement have not been consummated and the Land Purchase Agreement has been terminated, in which case, either party hereto, in
its sole discretion, may terminate this Agreement without further liability to the other party.

 

     

     

    

 

Article
II

PURCHASE AND SALE OF ASSETS

 

2.1   Purchase
and Sale of Assets. Subject to the terms of this Agreement, Seller agrees to sell, assign, transfer
and deliver to Buyer, and Buyer agrees to purchase and accept from Seller, at the Closing (as defined in Section 3.2 below), all
of Seller’s right, title and interest to the Purchased Assets. 

 

2.2   Conveyance
of Purchased Assets. The Buyer and Seller shall enter into the Bill of Sale or other instruments of conveyance as shall be
reasonably requested by Buyer for the transfer by Seller to Buyer of all of Seller’s right, title and interest in and to the Purchased
Assets. The bill of sale to be signed by the Buyer and Seller shall be in the form as attached hereto as Exhibit “A”
(the “Bill of Sale”).

 

2.3 Warranty.
At the Closing, and to the extent transferrable, Seller hereby transfers and assigns to Buyer any and all warranties with respect to
the Purchased Assets provided by the manufacturers to Seller in connection with its original purchase of the Purchased Assets,
subject to the relevant terms and conditions.

 

2.4   MIG
Guarantee. MIG hereby irrevocably, absolutely and unconditionally guarantees to Buyer the prompt, complete and full performance, when
due, of all of Seller covenants and obligations under this Agreement. This guaranty shall be a continuing guaranty and shall remain in
full force and effect with respect to MIG until the termination of the applicable agreement, representation, warranty, covenant or obligation
of Seller pursuant to, and in accordance with, this Agreement. MIG acknowledges that its obligations under this 2.4 shall not be released
or discharged in whole or in part by the insolvency, bankruptcy, liquidation, termination, dissolution, merger, consolidation or other
business combination of Seller or MIG. The guaranty contemplated in this Section 2.4 shall apply to any obligation of Seller hereunder,
regardless of whether MIG is specifically cited herein as being a party to such obligation. MIG shall be liable as principal debtor and
not solely as surety with respect to the performance of the obligations guaranteed hereunder. Buyer shall not be bound to exhaust their
recourse against Seller or any other Person before being entitled to payment or other recourse under the guarantee provided by MIG herein.

 

Article
III

CONSIDERATION; Closing

 

3.1   Purchase
Price. The purchase price (the “Purchase Price”) for the Purchase Assets shall be Nine Million, Four Hundred
Eighty-Three Thousand, One Hundred Forty-Four and No/Dollars ($9,483,144.00) in cash.

 

3.2   Closing.
The consummation of the transactions contemplated by this Agreement shall occur contemporaneously with the consummation of the transactions
contemplated by the Land Purchase Agreement. Upon closing, Buyer and Seller shall execute and deliver the Bill of Sale and Buyer shall
pay the Seller the Purchase Price within fifteen (15) days after Closing, via wire transfer to an account designated in writing by Seller.

 

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3.3   Security.
Buyer hereby grants a security interest in the Purchased Assets in favor of Seller to secure the obligations of Buyer to pay the Purchase
Price in full under this Agreement. Seller may, at such time as it determines appropriate, file a UCC 1 Financing Statement in such places
as it determines to evidence the security interest granted by Buyer to Seller under this Agreement. Upon the occurrence of a payment default
by Buyer, Seller may, in addition to any other remedies provided herein, take possession of the Purchased Assets, without liability for
trespass or conversion, for itself or sell the same at public or private sale, with or without having such property at the sale, after
giving Buyer reasonable notice of time and place of any public sale or of the time after which any private sale is to be made, at which
sale Luna Squares or its assigns may purchase unless otherwise prohibited by law. Unless otherwise provided by law, and without intending
to exclude any other manner of giving Buyer reasonable notice, the requirement of reasonable notice shall be met if such notice is given
in the manner prescribed in Section at least ten (10) business days before the time of sale. The proceeds from any such disposition, less
all expenses connected with the taking of possession, holding, and selling of the property (including reasonable attorneys’ fees
and other expenses), shall be applied as a credit against the indebtedness secured by the security interest granted in this paragraph.
Any surplus shall be paid to Buyer as otherwise required by law, and Buyer shall pay any deficiencies forthwith. Once the Purchase Price
is paid in full, such security interest shall be terminated and of no further force or effect without any further authorization or approval
of Seller. Seller agrees to cancel and/or withdraw all liens and encumbrances on the Purchases Assets, including any UCC 1 Financing Statements,
upon the termination of the security interest, if applicable.

 

Article
IV

REPRESENTATIONS AND WARRANTIES OF SELLER

 

The Seller makes no representation
or warranty whatsoever with respect to the Purchased Assets other than as expressly set out in this Agreement. By accepting this Agreement,
Buyer acknowledges that it has not relied on any representation or warranty made by Seller, or any other person on Seller’s behalf, other
than as set out in this Agreement. Seller represents and warrants to Buyer as follows:

 

4.1
Organization and Good Standing. Seller is a limited liability company duly organized, validly existing and in good standing
under the laws of the State of Delaware. Seller has all limited liability company power and authority to own, occupy and operate the Purchased
Assets. Seller is duly qualified to do business and is in good standing in all other jurisdictions in which the ownership of the Purchased
Assets make such qualification necessary, except where the failure to be so qualified would not have a material adverse effect on the
consummation of the transactions contemplated by this Agreement, taken as a whole.

 

4.2   Authority.
Seller has all limited liability company power and authority to execute and deliver this Agreement and all agreements contemplated hereunder
and to consummate the transactions contemplated hereunder. The execution, delivery and performance of the Agreement and all agreements
contemplated hereunder, and the consummation of the transactions contemplated hereunder, have been duly and validly authorized by all
necessary action on the part of Seller. The Agreement and all agreements contemplated hereunder will constitute, when executed and delivered,
the valid and binding obligations of Seller, enforceable against Seller in accordance with their terms, except that enforceability thereof
may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting creditor’s rights generally and by principles
of equity.

 

4.3   Effect
of Agreement. The execution, delivery and performance of this Agreement and all agreements contemplated hereunder, and the
consummation of the transactions contemplated hereunder, do not violate or result in a breach of the terms or provisions of, or constitute
a default under, create a Lien under, or conflict with or result in the termination of, or require Seller to obtain any consent or approval
under any agreements to which the Seller is bound, or the certificate of formation, governing documents or any documents comparable thereto
or any amendments or modifications thereto of Seller.

 

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4.4   Consents.
All consents, approvals, authorizations, and other requirements that must be obtained or satisfied by Seller that are necessary for the
execution of this Agreement, the agreements contemplated hereunder, and the consummation of the transactions contemplated hereunder, have
been obtained and satisfied.

 

4.5   Title
to Purchased Assets. Seller has good title to the Purchased Assets, and the right to transfer such title. The Purchased Assets
shall be sold and conveyed to Buyer free and clear of all liens, charges, claims, counterclaims, rights of set off, rights of recoupment
and similar rights, encumbrances, security interests, mortgages, pledges or other claims or interests of any nature (collectively, “Liens”).

 

4.6Taxes.All
taxes owed by Seller in connection with the Purchased Assets have been paid and there are no Liens on the Purchased Assets in connection
with, or otherwise related to, any failure to pay any tax.

 

4.7   Brokers.
No finder, broker, agent or other intermediary has acted for or on behalf of the Seller in connection with the negotiation or consummation
of this Agreement, and there are no claims for any brokerage commission, finder’s fee or similar payment due from Seller.

 

4.8   Warranty.
The Purchased Assets (i) are in good working order (ordinary wear and tear excepted); and (ii) have been maintained in accordance with
generally accepted industry practices.

 

4.9   Terahash
Warranty. Seller warrants that the Purchased Assets consisting of Bitcoin miners will provide no less than 557,832 terahash of nameplate
computing power (the “Guaranteed Hashrate”). Buyer shall be satisfied in its sole discretion that the actual hashrate of the
Purchased Assets (“Actual Hashrate”) meets the Guaranteed Hashrate. If Buyer determines, within 15 days of Closing
of this Agreement, acting reasonably, that the Actual Hashrate is at least 1% less than the Guaranteed Hashrate, and has given written
notice of that fact to Seller, then Seller shall provide additional Bitcoin mining rigs or reduce the Purchase Price pro-rata, at Buyer’s
discretion, to meet the Guaranteed Hashrate obligations, within 15 days of receipt of the notice by Seller. In determining the actual
hashrate of the Purchased Assets the Buyer must take into account the usual operating conditions for the Purchased Assets, and the manufacturer’s
recommended operating specifications. The testing of the hashrate will be conducted over a 2 hour period, between 8am – 10am, on
2 separate days within 15 days of Closing. The tested units will be online prior to 8am. The total average hashrate of the Bitcoin miner
fleet over the testing period, will be considered the hashrate of the fleet for purposes of this section. The Bitcoin miners will not
be overclocked during the period. Seller will provide any relevant data or information requested by Seller in relation to the making of
the hashrate determination. If (a) the Actual Hashrate fails to the meet the Guaranteed Hashrate and (b) Buyer elects to have additional
Bitcoin mining rigs provided, then Seller shall provide replacement Bitcoin mining rig of the same quantity and model.

 

For clarity, the Seller must
replace a Bitmain S19pro with another Bitmain S19pro with the same Hashrate and not with a Bitmain S19, or an Avalon, Canaan, or Whatsminer.

 

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Article
V

REPRESENTATIONS AND WARRANTIES OF BUYER

 

Buyer represents and warrants
to Seller as follows:

 

5.1   Organization
and Good Standing. Buyer is a limited liability company, duly organized, validly existing and in good standing under the laws
of the State of Georgia.

 

5.2   Authority.
Buyer has all requisite power and authority to execute and deliver this Agreement and all agreements contemplated hereunder, and to consummate
the transactions contemplated hereunder. The execution, delivery and performance of the Agreement and all agreements contemplated hereunder
and the consummation of the transactions contemplated hereunder have been duly and validly authorized by all necessary action on the part
of Buyer. The Agreement and all agreements contemplated hereunder have been duly executed and delivered by Buyer and constitute or will
constitute when executed and delivered valid and binding obligations of Buyer enforceable against Buyer in accordance with their terms,
except that enforceability thereof may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting creditors’
rights generally and by principles of equity.

 

5.3   Effect
of Agreement. The execution, delivery and performance of the Agreement and all agreements contemplated hereunder, and the consummation
of the transactions contemplated hereunder do not violate or conflict with the charter or bylaws and any amendments or modifications thereto
of Buyer.

 

5.4   Brokers.
No finder, broker, agent or other intermediary has acted for or on behalf of Buyer in connection with the negotiation or consummation
of this Agreement, and there are no claims for any brokerage commission, finder’s fee or similar payment due from Buyer.

 

Article
VI

CERTAIN COVENANTS AND UNDERSTANDINGS

 

6.1   Transfer
Taxes. Any and all Transfer Taxes (as defined below) shall be borne by Seller. Seller shall timely and accurately file all
necessary tax returns and other documentation with respect to Transfer Taxes (the “Transfer Tax Returns”) and timely
pay all such Transfer Taxes. If required by applicable law, Seller will join in the execution of any Transfer Tax Return. For purposes
of this Agreement, “Transfer Taxes” means all sales (including bulk sales), use, transfer, recording, value added, ad valorem,
privilege, documentary, gross receipts, registration, conveyance, excise, license, stamp or similar Taxes and fees arising out of, in
connection with or attributable to the transactions effectuated pursuant to this Agreement.

 

6.2 Title
and Risk of Loss. Seller and Buyer understand and agree that title to the Purchased Assets and the risk of loss with respect to the
Purchased Assets shall pass from Seller to Buyer upon Closing.

 

6.3   Further
Assurances. Seller shall, at any time on or after a Closing Date and at Seller’s
expense, execute, acknowledge and deliver all such further acts, deeds and instruments as may be reasonably required for the effective
transfer to and possession by Buyer, or its successors or assigns, of any of the respective Purchased Assets.

 

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Article
VII

INDEMNIFICATION

 

7.1   Survival
of Representations and Warranties. All representations, warranties, covenants and agreements set forth in this Agreement or
in any other certificate or document delivered pursuant to this Agreement shall survive the Closing and for a period of one year (1) year,
except for Section 4.9, which will expire at the Closing. No claim with regards to any representation, warranty, covenant or agreement
set forth in or arising from this Agreement or in any other certificate or document delivered pursuant to this Agreement shall be brought
or made after such one-year (1) year period.

 

7.2   Indemnification
by Seller. Seller shall defend, indemnify, and hold harmless Buyer and its officers, agents, representatives, successors and
assigns from and against any loss, damage, injury, settlement, judgment, award, fine, penalty, fee, charge, cost or expense (including
interest, investigative expenses and costs of experts and other witnesses and reasonable attorneys’ fees), and any claims or other
liabilities or obligations (collectively, “Losses”) arising from or related to (a) any misrepresentation or breach
of any representation or warranty by Seller contained in this Agreement or any of the agreements contemplated hereunder; (b) the use,
ownership, or operation by Seller of the Purchased Assets prior to the Closing; (c) Seller’s breach or failure to perform any covenant,
undertaking or other agreement contained in this Agreement; (d) any and all Taxes and assessments related to the Purchased Assets for
periods prior to the applicable Closing Date(s); and (e) any liabilities, debts or obligations of Seller.

 

7.3   Indemnification
by Buyer. Buyer shall defend, indemnify, and hold harmless Seller, its officers, agents, representatives, successors and assigns
from and against any Losses arising from or related to (a) any misrepresentation or breach of any representation or warranty by Buyer
contained in this Agreement or any of the agreements contemplated hereunder; (b) the use, ownership, or operation of the Purchased Assets
by Buyer after the Closing Date; (c) Buyer’s breach or failure to perform any covenant, undertaking or other agreement contained
in this Agreement; and (d) any and all Taxes and assessments of Buyer on the Purchased Assets related to periods after the Closing Date
applicable thereto.

 

7.4   Limitation
on Liability. The maximum aggregate amount of all Losses for which Seller or Buyer shall be liable under this Agreement shall
not exceed the Purchase Price.

 

7.5   No
Consequential Damages. Notwithstanding anything to the contrary elsewhere in this Agreement, no party shall, in any event,
be liable to any other person for any consequential, incidental, indirect, special or punitive damages of such other person, including
loss of future revenue, income or profits, diminution of value or loss of business reputation or opportunity relating to the breach or
alleged breach hereof.

 

7.6   Fraud
or Intentional Representation. Nothing in this Article VII shall be deemed to limit any claim(s) based upon fraud or intentional
misrepresentation (but not, for the avoidance of doubt, claims for negligent misrepresentation).

 

7.7 Exclusive
Remedy. This Article VII sets forth the entire liability and obligation
of Seller and the sole and exclusive remedy for Buyer for any and all claims after the Closing for any breach of any representation,
warranty, covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of this Agreement. 

 

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Article
VIII

MISCELLANEOUS

 

8.1   Notices.
All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to
have been given: (a) when delivered by hand (with written confirmation of receipt) or delivered by email; or (b) when received by the
addressee if sent by a nationally recognized overnight courier, for delivery the next day (receipt requested). Such communications must
be sent to the respective parties at the following addresses:

 

	 	If to Seller or MIG:	COSMOS INFRASTRUCTURE, LLC
	 	 	c/o Mawson Infrastructure Group, Inc.
	 	 	Level 5 97 Pacific Highway 
	 		North Sydney NSW 2060
	 	 	 
	 	 	Attn:  James Manning, Chief Executive Officer
	 	 	 
	 	 	Email:  james@mawsoninc.com
	 	 	 
	 	With a copy:	General Counsel
	 	 	Email: legal@mawsoninc.com
	 	 	 
	 	If to Buyer:	CleanSpark, Inc.
	 	 	2370 Corporate Circle, Suite 160
	 	 	Henderson, NV 89074
	 	 	Attn: Legal Department
	 	 	 
	 	With a copy to:	Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, 3414 Peachtree Road, NE, Suite 1500, 
	 	 	Atlanta, GA  30326, 
	 	 	Attn: Justin Daniels, Esq. 
	 	 	Email: jdaniels@bakerdonelson.com. 

 

The above addresses may be
changed by written notice to the other party in the manner provided above; however, that no notice of a change of address shall be effective
until actual receipt of such notice.

 

8.2   Governing
Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Georgia without
giving effect to any choice or conflict of law provision or rule of such jurisdiction.

 

8.3   Counterparts.
This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which shall constitute one and the
same instrument. Any signature page of this Agreement may be detached from any counterpart of this Agreement without impairing the legal
effect of any signatures thereon and may be attached to another counterpart of this Agreement identical in form hereto but having attached
to it one or more additional signature pages. Counterparts hereof which are transmitted by facsimile or electronic transmission shall
be given identical legal effect as an original.

 

8.4   Assignment.
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.
Neither this Agreement nor any of the rights, interest or obligations hereunder shall be assigned by Seller or Buyer without the prior
written consent of the non-assigning party. Any purported assignment without such consent shall be void.

 

8.5   Third
Party Beneficiaries. None of the provisions of this Agreement or any document contemplated hereby is intended to grant any
right or benefit to any person or entity which is not a party to this Agreement.

 

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8.6   Headings.
The article and section headings contained in this Agreement are solely for the purpose of reference, are not part of this Agreement and
shall not in any way affect the meaning or interpretation of this Agreement.

 

8.7   Amendments;
Waivers. This Agreement may not be amended, changed, supplemented or otherwise modified except by an instrument in writing
signed on behalf of all of the parties hereto. No waiver by any party of any of the provisions hereof shall be effective unless explicitly
set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of
any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether
occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from
this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power
or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

 

8.8   Confidentiality.
The parties shall hold in strictest confidence any information and material which is related to either Buyer or Seller’s business
or is designated by either Buyer or Seller as proprietary and confidential, herein or otherwise. Seller further covenants not to
disclose or otherwise make known to any individual or entity nor to issue or release for publication any articles or advertising or publicity
matter relating to this Agreement in which the name of Buyer or any of its affiliates is mentioned or used, directly or indirectly, unless
prior written consent is granted by the other party; provided, however, that either party shall be entitled to make any disclosures required
as a public company under applicable law, regulation or stock exchange rule without any consent of the other party, including the filing
of this Agreement as an exhibit thereto.

 

8.9   Severability.
In the event that any provision in this Agreement shall be determined to be invalid, illegal or unenforceable, in any respect, the remaining
provisions of this Agreement shall not be in any way impaired, and the illegal, invalid or unenforceable provision shall be fully severed
from this Agreement and there shall be automatically added in lieu thereof a provision as similar in terms and intent to such severed
provision as may be legal, valid and enforceable.

 

8.10   Entire
Agreement. This Agreement and the Schedules and Exhibits hereto constitute the entire contract between the parties hereto pertaining
to the subject matter hereof, and supersede all prior and contemporaneous agreements and understandings between the parties with respect
to such subject.

 

8.11 Definitions. All capitalized
terms that are not defined herein shall have the meaning ascribed to such terms in the Land Purchase Agreement.

 

8.12   Fees
and Expenses. Each party shall bear his or its own commissions, expenses and legal fees incurred on his or its behalf with
respect to this Agreement and the closing of the transactions contemplated hereby.

 

8.13   Arbitration.
All disputes, controversies, or claims arising out of or relating to this Agreement or a breach of this Agreement shall be submitted to
and finally resolved by arbitration under the rules of the American Arbitration Association (“AAA”) then in effect.
There shall be one arbitrator, such arbitrator shall be chosen by mutual agreement of the parties in accordance with AAA rules. The arbitration
shall be conducted in Atlanta, Georgia. The findings of the arbitrator shall be final and binding on the parties, and may be entered in
any court of competent jurisdiction for enforcement. Nothing herein shall prevent a party from seeking any provisional or equitable remedy
(including, but not limited to, an injunction) from any court having jurisdiction over the parties and the subject matter of the dispute
as is necessary to protect such Party’s rights.

 

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, each of
the parties hereto has caused this Agreement to be signed by its duly authorized officer as of the date first above written.

 

	 	SELLER: COSMOS INFRASTRUCTURE,
    LLC
	 	 
	 	A Delaware limited liability company
	 	 
	 	/s/ James Manning
	 	By:	 James Manning        
	 	Its: 	CEO

 

Counterpart Signature Page to

Equipment Purchase and Sale Agreement

 

     

     

    

 

IN WITNESS WHEREOF, each of
the parties hereto has caused this Agreement to be signed by its duly authorized officer as of the date first above written.

 

	 	BUYER: CleanSpark GLP, LLC
	 	 
	 	/s/ Zachary Bradford
	 	By:
	 	Its:

 

     

     

    

 

IN WITNESS WHEREOF, each of
the parties hereto has caused this Agreement to be signed by its duly authorized officer as of the date first above written.

 

	 	SELLER: MAWSON INFRASTRUCTURE
    GROUP, INC.
	 	 
	 	A Delaware limited liability company
	 	 
	 	/s/ James Manning
	 	By:	 James Manning
	 	Its:	 CEO

 

Counterpart Signature Page to

Equipment Purchase and Sale Agreementmcft-ex42_10.htm

EXHIBIT 4.2

DESCRIPTION OF THE REGISTRANT’S SECURITIES

REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES

EXCHANGE ACT OF 1934

 

As of June 30, 2022, MasterCraft Boat Holdings, Inc. (the “Company,” “us,” “we,” or “our”) had one class of securities, our common stock, par value $0.01 per share, registered under Section 12 of the Securities Exchange Act of 1934, as amended. Our common stock is listed on the Nasdaq Global Market under the symbol “MCFT.”

The following summary does not purport to be complete and is subject to and qualified in its entirety by reference to the General Corporation Law of the State of Delaware (the “DGCL”), our Amended and Restated Certificate of Incorporation (“Charter”) and our Fourth Amended and Restated Bylaws (“Bylaws”), as each may be amended from time to time.

Common Stock

General. Our Charter authorizes the issuance of 100,000,000 shares of our common stock, par value $0.01 per share. As of September 1, 2022, there were 18,151,436 shares of our common stock issued and outstanding.

Voting rights.  Holders of shares of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. Except as otherwise provided in our Charter or as required by law, all matters to be voted on by our stockholders must be approved by a majority of the shares present in person or by proxy at the meeting and entitled to vote on the subject matter or by a written resolution of the stockholders representing the number of affirmative votes required for such matter at a meeting. In contested director elections, a plurality of the votes cast shall be sufficient to elect directors.

Dividend rights. Holders of shares of our common stock are entitled to receive dividends when and if declared by our board of directors out of funds legally available therefor, subject to any statutory or contractual restrictions on the payment of dividends and to any restrictions on the payment of dividends imposed by the terms of any outstanding preferred stock.

Other matters. Upon our dissolution or liquidation or the sale of all or substantially all of our assets, after payment in full of all amounts required to be paid to creditors, the holders of shares of our common stock will be entitled to receive pro rata our remaining assets available for distribution. Holders of shares of our common stock do not have preemptive, subscription, redemption, or conversion rights, no redemption or sinking fund provisions are applicable to our common stock. All outstanding shares of common stock are fully paid and nonassessable. The rights and privileges of holders of our common stock are subject to any series of preferred stock that we may issue in the future.

37429460

Forum Selection

Our Charter provides that unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf; (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders; (iii) any action asserting a claim against us, any director or our officers or employees arising pursuant to any provision of the DGCL, our Charter or our Bylaws; or (iv) any action asserting a claim against us, any director or our officers or employees that is governed by the internal affairs doctrine, except, as to each of clauses (i) through (iv) above, for any claim as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or for which the Court of Chancery does not have subject matter jurisdiction.

Anti-Takeover Provisions

Our Charter and Bylaws, as well as the DGCL, contain provisions that may delay, defer, or discourage another party from acquiring control of us. These provisions, which are summarized below, may discourage coercive takeover practices or inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with our board of directors, which we believe may result in an improvement of the terms of any such acquisition in favor of our stockholders. However, they also give our board of directors the power to discourage acquisitions that some stockholders may favor.

Section 203 of the DGCL. We are subject to Section 203 of the DGCL. Subject to certain exceptions, Section 203 prevents a publicly held Delaware corporation from engaging in a “business combination” with any “interested stockholder” for three years following the date that the person became an interested stockholder, unless the interested stockholder attained such status with the approval of our board of directors or unless the business combination is approved in a prescribed manner. A “business combination” includes, among other things, a merger or consolidation involving us and the “interested stockholder” and the sale of more than 10% of our assets. In general, an “interested stockholder” is any entity or person beneficially owning 15% or more of our outstanding voting stock and any entity or person affiliated with or controlling or controlled by such entity or person. 

Authorized but Unissued Shares. The authorized but unissued shares of our common stock and our preferred stock are available for future issuance without stockholder approval, subject to any limitations imposed by the listing standards of The Nasdaq Global Market. These additional shares may be used for a variety of corporate finance transactions, acquisitions, and employee 

 

benefit plans. The existence of authorized but unissued and unreserved common stock and preferred stock could make more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger, or otherwise.

Stockholder Action by Written Consent. Our Charter and Bylaws provide that any action required or permitted to be taken by our stockholders at an annual meeting or special meeting of stockholders may only be taken if it is properly brought before such meeting and may be taken by written consent in lieu of a meeting only if the action to be effected by such written consent and the taking of such action by such written consent have been previously approved by the board of directors.

Special Meetings of Stockholders. Our Charter and Bylaws also provide that, except as otherwise required by law, special meetings of the stockholders may only be called by our board of directors.

Advance Notice Requirements for Stockholder Proposals and Director Nominations. In addition, our Bylaws provide for an advance notice procedure for stockholder proposals to be brought before an annual meeting of stockholders, including proposed nominations of candidates for election to our board of directors. In order for any matter to be “properly brought” before a meeting, a stockholder must comply with advance notice and duration of ownership requirements and provide us with certain information. Stockholders at an annual meeting may only consider proposals or nominations specified in the notice of meeting or brought before the meeting by or at the direction of our board of directors or by a qualified stockholder of record on the record date for the meeting, who is entitled to vote at the meeting and who has delivered timely written notice in proper form to our secretary of the stockholder's intention to bring such business before the meeting. These provisions could have the effect of delaying stockholder actions that are favored by the holders of a majority of our outstanding voting securities until the next stockholder meeting.

Limitations on Liability and Indemnification of Officers and Directors

Our Charter and Bylaws provide indemnification for our directors and officers to the fullest extent permitted by the DGCL. In addition, as permitted by Delaware law, our Charter includes provisions that eliminate the personal liability of our directors for monetary damages resulting from breaches of certain fiduciary duties as a director. The effect of these provisions is to restrict our rights and the rights of our stockholders in derivative suits to recover monetary damages against a director for breach of fiduciary duties as a director, except that a director will be personally liable for:

	
 
	
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any breach of his duty of loyalty to us or our stockholders;

 

	
 
		

	
 
	
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acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;

	
 
	
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any transaction from which the director derived an improper personal benefit; or

	
 
	
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improper distributions to stockholders.

These provisions may be held not to be enforceable for violations of the federal securities laws of the United States.

Listing

Our common stock is listed on The Nasdaq Global Market under the symbol “MCFT.”

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is American Stock Transfer & Trust Company, LLC.

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