The "Most Favored Nation" clause is a contractual provision that ensures a party receives terms that are at least as favorable as those given to any other party in similar agreements. This clause is commonly used to prevent discrimination and to maintain competitive equal footing among contracting parties.
Reservation Fee. In exchange for the ROFR and other terms hereof, we shall provide Oklo $25,000,000 (the “Payment”) within fifteen (15) days of executing this LOI. The Payment shall be returned to us in the form of a 10% discount to the Most Favored Nation Pricing (as defined below) in a future PPA (location to be determined). During the term of any PPA, Oklo will offer its power (including equipment and services) to us at the Most Favored Nation Pricing (as defined below). “Most Favored Nation Pricing” shall be ####. The pricing set out in a PPA shall include an additional discount if needed such that the total savings against Most Favored Nation Pricing over the course of the PPA is equivalent to the Payment.
Most Favored Nation. In exchange for the Payment, Oklo agrees that it shall not enter into, effective on or after the date of this LOI, any letter of intent, PPA or similar agreements or understanding (the “Other Agreement”) with any current or prospective third-party customer of Oklo that would grant to such third-party customer any more favorable agreement terms, material terms or Most Favored Nation Pricing than those set in this LOI (the “Most Favored Nation”), unless we’re provided with: (i) reasonable advanced notice of the proposed Other Agreement; (ii) any agreements or material or other materials relevant to understanding the terms of the proposed Other Agreement; and (iii) the opportunity, after time to consider of no more than ####, to receive the more favorable provisions, terms, pricing, etc. included in the proposed Other Agreement (the “Most Favored Nation Notice”). Furthermore, Oklo represents and warrants that it has or will disclose to us all agreements, including PPA’s and similar agreements or understanding with respect to Oklo, if effective after the date of the LOI, that trigger our Most Favored Nation rights as described in this paragraph.
The Company also signed an amendment to the April 2019 SPA with this Lender, that in exchange for waiving his Most Favored Nation Right with respect to the November 5, 2019 public offering, this Lender was able to exercise this right at any time following this offering, under the offering terms.
On November 5, 2019, the Company repaid Debentures in the amount of $470 thousand to the other Lender. Also, the Company paid to the other Lender an amount of $330 thousand for waiving his Most Favored Nation Right with respect only to the November 5, 2019 public offering. Following a public offering of the Company’s ADSs on November 5, 2019, the outstanding Warrants price of the said Lender was reset to $8.00.
The Company also agreed with one of the Lenders that he may exercise his respective Most Favored Nation Rights at any time for their total outstanding Debenture balance, while the respective Debenture was outstanding, in connection with the Company’s November 2019 Public Offering. If the Lender decided to exercise his Most Favored Nation Rights in connection with the November 2019 Public Offering, then the Lender would exchange his debentures for (i) ADSs at an exchange rate equal to $7.00, the per ADS offering price in the November 2019 Public Offering, and (ii) an even number of ADS purchase warrants at $7.70 per ADS (the “$7.70 MFN Warrants”), which $7.70 MFN Warrants were to be in form and substance identical to the warrants issued in the concurrent private placement to the November 2019 Public Offering, except for also having cashless exercise mechanism.
The Lenders have a most favored nation right, or the Most Favored Nation Right, for the term of the debenture with respect to a subsequent financing on better terms such that the Lenders may convert into the subsequent financing on a dollar-for-dollar basis.
Most Favored Nation: The Notes and Warrants shall include most favored nation provisions cover any other securities currently outstanding or issued by the Company in the future.
ADSs and warrants (assuming the exercise of the Most Favored Nation Rights) issuable upon the conversion of the April 2019 Financing Debentures and the Greenshoe Debentures. In the event that the April 2019 Financing Debentures and the Greenshoe Debentures are converted pursuant to the Most Favored Nation Rights in connection with this offering, at an assumed public offering price of $1.50 per Unit, the last reported sales price of our ADS on the Nasdaq Capital Market on April 15, 2020, such debentures would be convertible into an aggregate of 31,788,880 Ordinary Shares (794,722 ADSs) subject to adjustments;
Pursuant to the Term Sheet, the Company and Meteora agreed among other things (i) to make all subscription warrants held by Meteora immediately eligible to accelerate the share conversion provisions of the Amended and Restated Warrant Purchase Agreement in exchange for a cash payment, (ii) to grant Meteora “Most Favored Nation” status with respect to warrant restructuring for so long as any subscription warrants remain outstanding and (iii) to grant certain registration rights to Meteora.
1.Most Favored Nation. If the Company at any time sells or issues any debt, equity or convertible securities (collectively, “Subsequent Securities”) on terms that differ from the Transaction Documents, then the Company will provide Investor with written notice of such sale or issuance, including the terms of the Subsequent Securities (the “MFN Notice”), no later than thirty (30) days after the closing date thereof. In the event Investor, in its reasonable discretion, determines that any Subsequent Securities contain terms more favorable to the holder(s) thereof than the terms set forth in the Notes or the Securities Purchase Agreement, Investor may elect to exchange the Notes that it purchased pursuant to the Transaction Documents for such Subsequent Securities.
10. MOST FAVORED NATION. If, while this Debenture is outstanding, the Company (i) issues other indebtedness of the Company (“New Debt”) or (ii) modifies the terms of indebtedness of the Company existing on November 8, 2023 (“Existing Debt” and, together with New Debt, the “Other Debt”), then the Company will provide the Holder with written notice thereof, together with a copy of all other documentation relating to such Other Debt. The Company will provide such notice to Holder promptly following the issuance of such Other Debt. In the event Holder determines that the terms or conditions of such Other Debt are preferable to the terms or conditions of this Debenture, Holder will notify the Company in writing within five (5) days following Holder’s receipt of such notice from the Company; provided, however, that no failure on the part of the Holder to provide such written notification will operate as a waiver of such Holder’s rights under this Section 10. Promptly after receipt of such written notice from Holder, but in any event within five (5) calendar days, the Company will amend and restate this Debenture so as to give such Holder the benefit of such more preferable terms or conditions, excluding the Principal and Interest; provided, further, however, that in the event that the Company shall fail to amend and restate this Debenture, the Holder shall still enjoy all such rights under the modified Debenture as if the Company had properly provided such amended and restated Debenture as called for in this Section 10.
Dada hereby grants to WCI and its Affiliates, and shall ensure that WCI and its Affiliates receive, most favored nation treatment that is the same as the most favored nation treatment that Dada grants to JD with respect to pricing at each service level and in each product-based and other service category that Dada offers.
6. Most Favored Nation During the Cooperation Term, the Contribution Margin Per Order generated from Walmart Stores on the O2O Sales Platform shall be no higher than the Contribution Margin Per Order generated from any other supermarket retailers on the O2O Sales Platform whose annual gross merchandise volume generated from the O2O Sales Platform accounts for at least 3% of the total annual gross merchandise volume generated from the O2O Sales Platform, as evidenced by a certificate duly issued within the first quarter after the end of each calendar year (starting from the fourth quarter of 2018, followed by calendar year 2019) by one of the Big 4 accounting firms (i.e., PricewaterhouseCoopers, Ernst & Young, KPMG or Deloitte) as designated by Dada, which shall specify the calculation of the Contribution Margin Per Order in reasonable detail; provided that the orders generated from a given supermarket store on the O2O Sales Platform within six (6) months after launch of such store shall not be included in the calculation of the Contribution Margin (“First Audit Process”). In the event that WCI in its discretion is not satisfied with the certification, WCI may, by delivery of written notice to Dada, require Dada to appoint another Big 4 accounting firm as the auditor, subject to approval by WCI, to (i) conduct a separate audit and (ii) issue the certificate described in this Section 6 (“Second Audit Process”). Such audit shall abide by the confidentiality obligations set forth herein and between Dada and the other supermarket retailers, no Party shall be obligated to disclose any information that will result in such Party’s breach of confidentiality obligations to third parties, and each Party may reasonably redact such sensitive information to comply with anti-trust, securities and other Legal Requirements. Fees and expenses for the certification process set forth in this Section 6 shall be first borne by Dada, provided that, if the Second Audit Process reports no material variation from the determinations of Contribution Margin Per Order undertaken in the First Audit Process and no violation of this Section 6, then any and all expenses incurred by Dada (with reasonable substantiation) in connection with the Second Audit Process shall be reimbursed by WCI.
Furthermore, the Notes contain a “most favored nation” provision that allows each Investor to claim any preferable terms from any future securities, excluding certain except issuances.
7. Most Favored Nation. (a) On or about the date hereof, PWM has entered into (or is entering into) a share purchase agreement (each an “Other SPA”) with Biomedical Treasure Limited and Biomedical Future Limited (each an “Other Purchaser”), respectively, pursuant to which, among other things, PWM agrees to sell to such Other Purchaser, and such Other Purchaser agrees to purchase from PWM, all of PWM’s right, title and interest in and pertaining to such number of Ordinary Shares as set forth in the applicable Other SPA (collectively, the “Other Sale Shares”). In connection with the entry into the respective Other SPAs, PWM and each of the Other Purchasers and their respective Affiliates have entered into (or are entering into) a letter agreement (each an “Other Letter Agreement;” and the Other Letter Agreements and the Other SPAs are collectively referred to as the “Other Agreements”). PWM represents that a true and complete copy of the execution version of each Other Agreement has been provided to 2019B Cayman on or before the date hereof. (b) From the execution of this Letter Agreement until the earlier of (i) the 2019B Cayman SPA Closing and (ii) the valid termination of the 2019B Cayman SPA, PWM shall not enter into any agreement or undertaking (including any supplemental or amendment agreement with respect to the Other SPAs with any of the Other Purchasers or their respective Affiliates (collectively, the “Other Purchaser Parties”)) (each of such agreement or undertaking is referred to as an “Additional Agreement”) that has the effect of providing more favorable terms to such Other Purchaser Party with respect to its purchase of the applicable Other Sale Shares in respect of the per share price, representations and warranties, closing conditions, payment terms, termination rights, sharing of Consortium Expenses (to the extent not based upon the PWM Consortium Fees Percentage as applied mutatis mutandis with respect to the applicable Other Sale Shares) and other material aspects of such transaction than the terms provided to 2019B Cayman with respect to the purchase of the Proposed Sale Shares under the 2019B Cayman SPA and this Letter Agreement unless, in any case, (x) 2019B Cayman has consented to such Additional Agreement in writing or is otherwise a party to such Additional Agreement, or (y) such more favorable terms have been provided to 2019B Cayman and apply to the purchase of the Proposed Sale Shares. Without limiting the generality of the foregoing, in the event the long stop date referred to in the termination provision in any Other SPA is extended by PWM and the relevant Other Purchaser, and 2019B Cayman shall have not committed any material breach of the 2019B Cayman SPA as of such extension, the long stop date referred to in Section 6.2(a)(ii) of the 2019B Cayman SPA shall be equally extended.
“Most Favored Nation” (MFN) is a clause used mainly in international trade agreements and various types of contracts that ensures a party receives equal treatment or, in some cases, the best possible terms available. This means if a party, such as a country or business, offers more favorable terms to any other party, the same terms must be extended to the party with the MFN status. In essence, it is a commitment to provide nondiscriminatory trade advantages, such as lowering tariffs or granting market access, to all MFN partners.
You should use a Most Favored Nation clause when you want to ensure that you are receiving terms that are as favorable as those offered to any other party. This is particularly important in scenarios where:
When drafting a Most Favored Nation clause, clarity and specificity are key. Here’s a simplified example of how you might structure such a clause:
MFN Clause: The Supplier agrees that the terms and conditions extended under this Agreement shall be no less favorable than the most favorable terms offered to any other party. If the Supplier extends more favorable terms to any other party, the Supplier shall promptly notify and extend such terms to the Buyer.
Ensure that you clearly define what “more favorable terms” mean, such as pricing, delivery conditions, or other relevant factors, and include any necessary conditions under which the MFN clause applies.
Most Favored Nation clauses are commonly included in:
These clauses ensure that parties are not competitively disadvantaged and can level the playing field in various contractual contexts.
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