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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): June 18,
2024
ZOOMCAR
HOLDINGS, INC.
(Exact
name of registrant as specified in its charter)
Delaware |
|
001-40964 |
|
99-0431609 |
(State
or other jurisdiction
of
incorporation) |
|
(Commission
File Number) |
|
(IRS
Employer
Identification
No.) |
Anjaneya
Techno Park,
No.147,
1st Floor
Kodihalli,
Bangalore,
India |
|
560008 |
(Address
of principal executive offices) |
|
(Zip
Code) |
+91
99454-8382
(Registrant’s
telephone number, including area code)
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:
☐ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange
on
which registered |
Common
Stock, par value $0.0001 per share |
|
ZCAR |
|
The
Nasdaq Stock
Market LLC |
Warrants,
each exercisable for one share of Common Stock at a price of $5.71, subject to adjustment |
|
ZCARW |
|
The
Nasdaq Stock
Market LLC |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging
growth company ☒
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item
1.01. Entry into a Material Definitive Agreement
On June 18, 2024, Zoomcar
Holdings, Inc. (the “Company”) entered into a securities purchase agreement with certain institutional accredited
investors (the “Note Holders”) pursuant to which the Company issued and sold an aggregate of $3,600,000 in principal
amount of notes (the “Notes”) and warrants to purchase up to an aggregate of 52,966,102 shares of Company common stock
(the “Warrants”) for gross proceeds of $3,000,000. The closing occurred on June 20, 2024 (the “Closing Date”).
The
Notes are due nine (9) months from the date of issuance, provided that the Company is required to use the proceeds at the closing date
of one or more subsequent equity, debt or other capital raise(s) or any sale of tangible or intangible assets with net proceeds sufficient
to repay all or any portion of the amounts due under the Note (the “Maturity Date”). The Notes bear interest at a
rate of 15% per annum (up to 20% per annum during the occurrence of an Event of Default (as defined in the Notes)) computed on the basis
of a 360-day year and twelve 30-day months and payable in arrears on the Maturity Date.
The
Notes contain event of default (collectively, “Event of Default”) provisions, including, but not limited to, upon
any failure to make any payments of principal or interest under the Notes when due, any material breach of any representations, warranties
or covenants in any other transaction documents with the Note Holders, a default under any other indebtedness of the Company or its subsidiaries
occurring after the date of issuance of the Notes, the commencement of or consent to any bankruptcy or liquidation proceedings, a final
judgment rendered against the Company or its subsidiaries in an amount aggregating in excess of $250,000, or a Material Adverse Effect
(as defined in the Notes). Upon the occurrence of an Event of Default, other than an Event of Default relating to a bankruptcy or liquidation
of the Company, the Note Holders can require the Company to redeem the Notes at a premium of 125% of the amount then due under the Notes.
In the case of an Event of Default relating to a bankruptcy or liquidation of the Company, the Note Holders can require the Company to
redeem the note at 100% of the amount then due under the Notes. The Note is also subject to optional redemption at the option of the
Note Holder in the event of a change of control (as defined in the Note).
If
at any time the Note is outstanding, the Company engages in any capital raising activity, the Company is required to utilize the net
proceeds from such capital raise to repay the Notes in full. In the event of a capital raise by the Company which yields net proceeds
insufficient to repay the Notes in full, the Company is required to apply the proceeds in the raise pro rata among the Note Holders to
pay the portion of the Notes that can be paid. The Company is also permitted to prepay the Notes at any time provided that the Company
will pay all interest under the Note that would have accrued had the Note been held to the Maturity Date. If on any redemption date,
the Company has insufficient assets to repay the Notes, the Company covenants to take all actions reasonably within its means to maximize
the value of the Company’s assets to repay the Notes.
The
Notes contain certain negative covenants including, but not limited to, a prohibition on incurring indebtedness (other than certain permitted
indebtedness) or allowing or suffering to exist any liens or encumbrances (other than permitted liens), repaying or redeeming any outstanding
indebtedness other than the Notes, redeeming or repurchasing any equity interests of the Company, declaring any dividends or distributions,
changing the Company’s business, entering into any related party transactions or issuing any securities that would cause a breach
or default of the Notes. The Notes also contain certain affirmative covenants, including, but not limited to, maintaining good standing,
maintaining the Company’s property and intellectual property, maintaining current insurance policies and providing prompt notice
in the event of an Event of Default or the commencement of voluntary bankruptcy or liquidation proceedings. The Notes are transferrable.
The
Warrants are each exercisable for one share of common stock at an initial exercise price of $0.1416 per share. The Warrants may be exercised
at any time on or after the later of (i) the six month anniversary of the issuance date or (ii) the date that the Company obtains Stockholder
Approval (as herein after defined) and expiring at 5:00 p.m. (New York City time) on the five year anniversary of the date that of the
last to occur of (a) the Resale Effective Date (as hereinafter defined) and (b) the date that Stockholder Approval is obtained.
Pursuant
to the terms of the Warrant, the Company is required to hold a special meeting of stockholders (which may also be at the annual meeting
of stockholders) at the earliest practicable date after the issuance date, but in no event later than one hundred (100) days after the
Closing Date for the purpose of obtaining stockholder approval for the exercisability of the Warrants and for certain of the provisions
included therein, including, the “alternative cashless exercise” provision and adjustments to the exercise price and number
of shares issuable upon exercise of the Warrant following a Dilutive Issuance (as defined herein) or Share Combination Event (as defined
herein). The Company is required to file a proxy statement within fifteen (15) days following the filing of the Company’s Annual
Report on Form 10-K for the fiscal year ended March 31, 2024 and thereafter to use its best efforts to obtain Stockholder Approval. In
the event Stockholder Approval does not occur, the Company will be required to hold additional meetings at least one time every three
(3) months until the earlier of the date Stockholder Approval is obtained or the Warrants are no longer outstanding. In the event that
the Company is unable to obtain Stockholder Approval, the Warrants will not be exercisable and therefore will have no value.
The
Warrant contains a standard cashless exercise provision permitting the holder to exercise the Warrant on a cashless basis if the market
price of the Company’s common stock at the time of exercise is in excess of the exercise price of the Warrant and there is not
an effective resale registration statement available for the resale of the Warrants. Additionally, the Warrant contains an “alternative
cashless exercise” provision which gives the Warrant holder the right to exchange the Warrant on a one-for-one basis for shares
of common stock at any time that the Warrant is exercisable without any cash payment and without regard to the then market price of the
Company’s common stock or exercise price of the Warrant.
In
addition, the Warrants include a provision that resets the Warrant exercise price with a proportionate adjustment to the number of shares
underlying the Warrant in the event of a reverse split of the Company’s common stock at any time between the issuance date and
the three year anniversary of the issuance date (a “Share Combination Event”). In the event of a Share Combination
Event, the exercise price of the Warrant will be reset to a price equal to the lesser of (i) the then exercise price and (ii) the
lowest volume weighted average price (VWAP) during the period commencing five trading days immediately after the date the Company effects
a reverse stock split, subject to a floor price of $0.1416 (which is the “Minimum Price” under Nasdaq rules) prior to receipt
of Stockholder Approval or $0.02832 following receipt of Stockholder Approval (in each case, adjusted for any stock dividend, stock split,
stock combination, reclassification or similar transaction, the “Floor Price”).
The
Warrants are also subject to full ratchet anti-dilution protection for any issuances of Company securities (other than certain excluded
issuances) at a price or effective price (as determined in accordance with the terms of the Warrant, the “Dilutive Issuance
Price”) that is less than the then current exercise price of the Warrants following the issuance date (a “Dilutive
Issuance”). In the event of a Dilutive Issuance, the exercise price of the Warrants will be reduced to the lower of the Dilutive
Issuance Price and the lowest VWAP during the five consecutive trading days commencing after the date of the Dilutive Issuance, in each
case, subject to the Floor Price.
The
Warrants are also subject to customary adjustments for stock dividends, stock splits, distributions and the like. If a fundamental transaction
occurs, then the successor entity will succeed to, and be substituted for the Company, and may exercise every right and power that the
Company may exercise and will assume all of the Company’s obligations under the Warrants with the same effect as if such successor
entity had been named in the Warrant itself. If holders of Company common stock are given a choice as to the securities, cash or property
to be received in a fundamental transaction, then the holder shall be given the same choice as to the consideration it receives upon
any exercise of the Warrant following such fundamental transaction. Notwithstanding anything to the contrary, in the event of a fundamental
transaction, the holder will have the right to require the Company or a successor entity to repurchase its warrants at the Black Scholes
value by paying the same type or form of consideration (and in the same proportion) that is being offered and paid to the holders of
common stock of the Company in connection with the fundamental transaction; provided, however, that if the Fundamental Transaction is
not within the Company’s control, including not approved by the Company’s Board of Directors, then the holder shall only
be entitled to receive the same type or form of consideration (and in the same proportion), at the Black Scholes value of the unexercised
portion of its warrants, that is being offered and paid to the holders of the Company’s common stock in connection with the fundamental
transaction.
A
holder does not have the right to exercise any portion of the Warrants if the holder (together with its affiliates) would beneficially
own in excess of 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the
exercise, as such percentage ownership is determined in accordance with the terms of the Warrants. However, any holder may increase or
decrease such percentage to any other percentage not in excess of 9.99%, provided that any increase in such percentage shall not
be effective until 61 days following notice from the holder to us.
Pursuant
to a registration rights agreement between the Company and the purchasers, the Company is also obligated to file a registration statement
registering the resale of the shares underlying the Warrants within the earlier of (a) fifteen (15) days after the filing of the Company’s
Annual Report on Form 10-K for fiscal year ended March 31, 2024 and (b) forty-five (45) days after the Closing Date. The Company is required
to ensure that the initial registration statement is effective within 45 calendar days of the filing date (up to 75 days if the SEC conducts
a full review) (the effective date of such registration statement, the “Resale Effective Date”).
In
connection with the Offering, the Company retained Aegis Capital Corp. to act as the placement agent (the “Placement Agent”
or “Aegis”). For acting as the placement agent, the Company agreed to pay the Placement Agent, subject to certain
exceptions: (i) a cash fee equal to ten percent (10%) of the aggregate gross proceeds raised by the Placement Agent in the Offering,
(ii) a non-accountable expense allowance of up to three percent (3%) of the aggregate gross proceeds raised by the Placement Agent in
the Offering, and (iii) five-year warrants to purchase up to 2,118,644 shares of common stock in substantially the same form as the Warrants
at an exercise price of $0.1416 per share. The Company also agreed to pay a warrant solicitation fee of 5% of the proceeds received from
the cash exercise of any Warrants and agreed to reimburse the expenses of the Placement Agent’s counsel up to $85,000. In addition
to the foregoing fees, the Company has agreed to reimburse certain legal expenses of the Note Holders and expects to pay certain cash
fees and issue a warrant to purchase 741,526 shares of common stock to a registered broker dealer related to certain tail rights held
by such registered broker dealer.
The
Notes and Warrants are not being registered under the Securities Act of 1933, as amended (the “Securities Act”), and were
offered and sold pursuant to an exemption from registration under Section 4(a)(2) of the Securities Act.
The
foregoing description of the offering does not purport to be complete and is qualified in its entirety by reference to the securities
purchase agreement, Note, Warrants, registration rights agreement and placement agency agreement, copies of which are filed as Exhibit
10.1, Exhibit 10.2, Exhibit 4.1, Exhibit 10.3 and Exhibit 10.4 to this Current Report.
Item 2.03.
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The
information set forth in Item 1.01 above regarding the Notes is incorporated herein by reference into this Item 3.02.
Item
3.02. Unregistered Sales of Equity Securities.
The
information set forth in Item 1.01 above is incorporated herein by reference into this Item 3.02.
Item
5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers.
On
June 20, 2024, Greg Moran, the Company’s Chief Executive Officer, was terminated from his role. Pursuant to Mr. Moran’s employment
agreement, Mr. Moran is required to resign from the Board of Directors of the Company (the “Board”) as a result of
such termination.
Following
such termination, effective June 20, 2024, the Board appointed Hiroshi Nishijima, the Company’s Chief Operating Officer, as interim
Chief Executive Officer. Mr. Nishijima has been the Company’s Chief Operating Officer since May 2022. Mr. Nishijima
has more than half a decade of experience in the app-based marketplace business, especially in the mobility sector. Prior to his current
role at the Company, from April 2020 to April 2022, Mr. Nishijima served as the Chief Executive Officer of Via Mobility Japan, K.K.,
a private on-demand ride sharing service providing cost-effective mobility solutions for public transportation. From January 2016 to
April 2020, he served in multiple leadership positions at Grab Holdings Ltd (Nasdaq: GRAB), an app-based transportation, grocery, food,
and Fintech services platform. Mr. Nishijima’s roles at Grab included being the Head of Transport Business of Grab Indonesia and
the Deputy Chief of Staff to the Chief Executive Officer of Grab. Prior to working at Grab, Mr. Nishijima worked at Boston Consulting
Group, Inc., first serving as Project Leader of its Japan office from December 2010 to December 2012, then transferred to its New Delhi
office in 2013, and Singapore office in 2014 as a Principal. From April 2006 to November 2010, Mr. Nishijima was a Project Manager at
Roland Berger’s Tokyo, Japan and Dusseldorf, Germany offices. At Boston Consulting Group and Roland Berger, Mr. Nishijima was a
core member of teams which supported clients in the automotive sector globally. From April 1999 to March 2005, he also served as a Project
Leader at Honda Motor Ltd.. Mr. Nishijima received a Bachelor’s of Law (LLB) from Keio University in 1999.
On
June 18, 2024, in connection with the offering, Graham Gullans resigned from the Board, effective as of the closing of the offering.
Mr. Gullans resignation is not due to a disagreement with a Company.
Effective
as of the closing of the offering, the Board appointed John Clarke and Mark Bailey to the Board as directors to fill vacancies left by
the resignations of Mr. Gullans and David Ishag. Each of the new directors qualifies as “independent” under Nasdaq Stock
Market rules. Mr. Clark, who has been appointed as a Class I director, and Mr. Bailey, who has been appointed as a Class III director,
were each designated to the Board by Aegis pursuant to an arrangement between the Company and Aegis which provides that Aegis has the
one-time right to designate two (2) independent directors to the Board and certain board observer rights. Other than the foregoing, neither
Mr. Clark nor Mr. Bailey was appointed as a director pursuant to any arrangement or understanding between the new director and any other
persons, naming such persons as director. There are no related-party transactions in which either of the new directors or any of their
immediate family members has an interest that would require disclosure under Item 404(a) of Regulation S-K. Each of the new directors
will receive compensation in accordance with the Board “Non-Employee Director” fee schedule. The Board has not yet appointed
Mr. Clarke or Mr. Bailey to any committees.
Item
8.01. Other Events
Upon
closing of this offering, the Company expects to have approximately $1.7 million of cash and cash equivalents after giving effect to
the payment of offering fees and expenses and the payment of certain working capital expenditures. The Company believes that current
cash and cash equivalents will allow the Company to continue operations through November 2024, assuming that the Company does not make
any payments on its currently outstanding indebtedness. The Company was also recently advised by its largest investor and director that
he would no longer commit to continue his support to the Company in the event of any liquidity requirements arising in foreseeable future.
Accordingly, the Company will need to raise additional capital imminently. The Company has entered into a non-binding letter of engagement
with Aegis to explore a follow-on financing.
Item
9.01 Financial Statements and Exhibits.
(c)
Exhibits
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Dated: June 21, 2024 |
Zoomcar Holdings, Inc. |
|
|
|
|
By: |
/s/ Hiroshi Nishijima |
|
Name: |
Hiroshi Nishijima |
|
Title: |
Interim Chief Executive Officer |
5
Exhibit 4.1
NEITHER THIS SECURITY NOR THE
SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
COMMON STOCK PURCHASE WARRANT
ZOOMCAR
HOLDINGS, INC.
Warrant Shares: _______ |
Issue Date: June _, 2024 |
THIS COMMON STOCK PURCHASE WARRANT
(the “Warrant”) certifies that, for value received, _____________ or its assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after
the later of (i) the six month anniversary of the date hereof or (ii) the date that the Company obtains Stockholder Approval (the “Initial
Exercise Date”) and expiring at 5:00 p.m. (New York City time) on the five year anniversary of the date that of the last to
occur of (a) the Resale Effective Date and (b) the date that Stockholder Approval is obtained (the “Termination Date”)
but not thereafter, to subscribe for and purchase from Zoomcar Holdings, Inc., a Delaware corporation (the “Company”),
up to [●] shares (as subject to adjustment hereunder, the “Warrant Shares”) of Common Stock. The purchase price
of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
Section 1. Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement
(the “Purchase Agreement”), dated June [●], 2024 (the “Pricing Date”), among the Company and
the purchasers signatory thereto.
Section 2. Exercise.
a) Exercise
of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on
or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a PDF copy submitted by e-mail
(or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the
earlier of (i) one (1) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section
2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified
in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise
procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall
be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding
anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder
has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall
surrender this Warrant to the Company for cancellation within 5 Trading Days of the date on which the final Notice of Exercise is delivered
to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available
hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable
number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and
the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of
such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of
this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase
hereunder at any given time may be less than the amount stated on the face hereof.
b) Exercise
Price. The exercise price per share of Common Stock under this Warrant shall be $[●], subject to adjustment hereunder
(the “Exercise Price”).
c) Cashless
Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained
therein is not available for the resale of the Warrant Shares by the Holder, then this Warrant may also be exercised, in whole or in part,
at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares
equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
(A) = as applicable:
(i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1)
both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant
to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation
NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading
Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading
Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable
Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered
within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day)
pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise
is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular
trading hours” on such Trading Day;
(B) = the Exercise
Price of this Warrant, as adjusted hereunder; and
(X) = the number
of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were
by means of a cash exercise rather than a cashless exercise.
If
Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the
Securities Act, the holding period of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. The
Company agrees not to take any position contrary to this Section 2(c).
The Holder may also
effect an “alternative cashless exercise”. In such event, the aggregate number of Warrant Shares issuable in such alternative
cashless exercise pursuant to any given Notice of Exercise electing to effect an alternative cashless exercise shall equal the aggregate
number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise
were by means of a cash exercise rather than a cashless exercise. Notwithstanding anything herein to the contrary, on the Termination
Date, this Warrant shall be automatically exercised via cashless exercise pursuant to this Section 2(c) (including an alternative cashless
exercise pursuant to this paragraph).
“Bid Price”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading
Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City
time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common
Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted
for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar organization
or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d)
in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith
by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the reasonable
fees and expenses of which shall be paid by the Company.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a
similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock
so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the
Company, the reasonable fees and expenses of which shall be paid by the Company.
d) Mechanics of Exercise.
i. Delivery
of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer
Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company
through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system
and either (A) there is an effective registration statement permitting the resale of the Warrant Shares by the Holder or (B) the Warrant
Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144 (assuming cashless exercise
of the Warrants), and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of
the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address
specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to the
Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the
number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date,
the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate
purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective
of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless
exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement
Period following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject
to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not
as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable
Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the third Trading Day after the Warrant Share Delivery
Date) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise.
The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding
and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a
number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery
of the Notice of Exercise.
ii. Delivery
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and
upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing
the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant.
iii. Rescission
Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i)
by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv. Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if
the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section
2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its
broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common
Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise
(a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s
total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained
by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise
at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the
Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in
which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been
issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common
Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with
an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the
Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable
to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit
a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree
of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock
upon exercise of the Warrant as required pursuant to the terms hereof.
v. No
Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall,
at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the
Exercise Price or round up to the next whole share.
vi. Charges,
Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental
expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant
Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however,
that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for
exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition
thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent
fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing
corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
vii. Closing
of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
e) Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise
any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise
as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting
as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)),
would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence,
the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number
of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude
the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant
beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or
nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject
to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its
Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial
ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder,
it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the
extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation
to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is
exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s
determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates
and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation,
and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any
group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may
rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report
filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice
by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request
of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock
then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion
or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date
as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall
be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock
issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation
provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of
the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held
by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will
not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be
construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph
(or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to
make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph
shall apply to a successor holder of this Warrant.
Section 3. Certain
Adjustments.
a) Stock
Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes
a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of
Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this
Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse
stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common
Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event
and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of
shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant
shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for
the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective
date in the case of a subdivision, combination or re-classification.
b) Adjustment
Upon Issuance of Securities. If, at any time while this Warrant is outstanding (such period, the “Adjustment Period”),
the Company issues, sells, enters into an agreement to sell, or grants any option to purchase, or sells, enters into an agreement to sell,
or grants any right to reprice, or otherwise disposes of or issues (or announces any offer, sale, grant or any option to purchase or other
disposition), or, in accordance with this Section 3(b), is deemed to have issued or sold, any shares of Common Stock or Common Stock
Equivalents (excluding any Excluded Securities (as defined below) issued or sold or deemed to have been issued or sold) for a consideration
per share (the “New Issuance Price”) less than a price equal to the Exercise Price in effect immediately prior to such
issue or sale or deemed issuance or sale (such Exercise Price then in effect is referred to as the “Applicable Price”)
(the foregoing a “Dilutive Issuance”), then simultaneously with the consummation (or, if earlier, the announcement)
of such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount equal to the lower of (a) the New Issuance
Price or (b) the lowest VWAP during the 5 consecutive Trading Day period commencing on the date of the Dilutive Issuance (such lower price,
the “Base Share Price”) and the number of shares of Common Stock issuable upon exercise of this Warrant shall be proportionately
adjusted such that the aggregate Exercise Price of this Warrant on the Issuance Date for the Warrant Shares then outstanding shall remain
unchanged; provided that the Base Share Price shall not be less than the Floor Price (subject to adjustment for reverse and forward stock
splits, recapitalizations and similar transactions following the date of the Purchase Agreement). Notwithstanding the foregoing, if one
or more Dilutive Issuances occurred prior to the Stockholder Approval being obtained and the reduction of the Exercise Price was limited
by clause (i) of the definition of Floor Price, once the Stockholder Approval is obtained, the Exercise Price will automatically be reduced
to equal the greater of (x) the lowest Base Share Price with respect to any Dilutive Issuance that occurred prior to the Stockholder Approval
being obtained, and (y) the price determined by reference to clause (ii) of the definition of Floor Price. If the Company enters into
a Variable Rate Transaction, the Company shall be deemed to have issued shares of Common Stock or share of Common Stock Equivalents at
the lowest possible price, conversion price or exercise price at which such securities may be issued, converted or exercised. “Floor
Price” means (i) prior to Stockholder Approval, a price equal to the Nasdaq Minimum Price on the Pricing Date, as defined in
Nasdaq Listing Rule 5635(d)(1)(A) (which price shall be appropriately adjusted for any stock dividend, stock split, stock combination,
reclassification or similar transaction), or (ii) following Stockholder Approval, a price equal to twenty percent (20%) of the Nasdaq
Minimum Price on the Pricing Date, as defined in Nasdaq Listing Rule 5635(d)(1)(A) (which price shall be appropriately adjusted for any
stock dividend, stock split, stock combination, reclassification or similar transaction). “Excluded Securities” means
any issuance of shares of Common Stock, restricted share units, Options and/or Convertible Securities (i) under the Company’s
current or future equity incentive plans or issued to employees, directors, consultants or officers as compensation or consideration in
the ordinary course of business, including any issuance of Options (and the underlying shares of Common Stock) in exchange for Options
issued under the Company’s equity incentive plans; provided, that with respect to consultants only, such issuances do not exceed
1 million shares of Common Stock (as adjusted for stock splits, reverse stock splits, stock dividends, stock combinations and similar
events) in any 12 month period, (ii) issued pursuant to the Purchase Agreement or any other agreements, Options, restricted share
units, Convertible Securities or Adjustment Rights (as defined below) existing as of the date hereof, (iii) issued pursuant to acquisitions
(whether by merger, consolidation, purchase of equity, purchase of assets, reorganization or otherwise), mergers, consolidations, reorganizations
or strategic transactions approved by a majority of the disinterested directors of the Company, provided that any such issuance shall
only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company or an owner
of an asset in a business complementary with the business of the Company and shall provide to the Company additional benefits in addition
to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of
raising capital or to an entity whose primary business is investing in securities, provided that such securities are issued as “restricted
securities” (as defined in Rule 144) and carry no registration rights that require or permit the filing of any registration statement
in connection therewith or (iv) to which a majority-in-interest of Holders of the Warrants consent in writing. “Adjustment
Right” means any right granted with respect to any securities issued in connection with, or with respect to, any issuance or
sale (or deemed issuance or sale in accordance with this Section 3(b)) of shares of Common Stock (other than rights of the type described
in Sections 3(a) through (e)) that could result in a decrease in the net consideration received by the Company in connection with, or
with respect to, such securities (including, without limitation, any cash settlement rights, cash adjustment or other similar rights).
For all purposes of the foregoing, the following shall be applicable:
i. Issuance
of Options. If, during the Adjustment Period, the Company in any manner grants or sells any Options (other than Excluded Securities)
and the lowest price per share for which one share of Common Stock is issuable upon the exercise of any such Option or upon conversion,
exercise or exchange of any Convertible Securities issuable upon exercise of any such Option (such shares of Common Stock issuable upon
such exercise of any Option or upon conversion, exercise or exchange of any Convertible Securities, the “Convertible Securities
Shares”) is less than the Applicable Price, then such shares of Common Stock shall be deemed to be outstanding and to have been
issued and sold by the Company at the time of the granting or sale of such Option for such price per share. For purposes of this Section
3(b)(i), the “lowest price per share for which one share of Common Stock is issuable upon the exercise of any such Option or upon
conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option” shall be equal to (A) the
sum of (1) the lowest amount of consideration (if any) received or receivable by the Company with respect to any one Convertible
Securities Share upon the granting or sale of such Option, upon exercise of such Option and upon conversion, exercise or exchange of any
Convertible Security issuable upon exercise of such Option and (2) the lowest exercise price set forth in such Option for which one
Convertible Securities Share is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible
Securities issuable upon exercise of any such Option, minus (B) the sum of all amounts paid or payable to the holder of such Option
(or any other Person), with respect to any one Convertible Securities Share, upon the granting or sale of such Option, upon exercise of
such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option plus the value
of any other consideration received or receivable by, or benefit conferred on, the holder of such Option (or any other Person), with respect
to any one Convertible Securities Share. Except as contemplated below, no further adjustment of the Exercise Price shall be made upon
the actual issuance of such Convertible Securities Share or of such Convertible Securities upon the exercise of such Options or upon the
actual issuance of such Convertible Securities Share upon conversion, exercise or exchange of such Convertible Securities.
ii. Issuance
of Convertible Securities. If, during the Adjustment Period, the Company in any manner issues or sells any Convertible Securities
(other than Excluded Securities) and the lowest price per share for which one Convertible Securities Share is issuable upon the conversion,
exercise or exchange thereof is less than the Applicable Price, then such Convertible Securities Share shall be deemed to be outstanding
and to have been issued and sold by the Company at the time of the issuance or sale of such Convertible Securities for such price per
share. For the purposes of this Section 3(b)(ii), the “lowest price per share for which one Convertible Securities Share is issuable
upon the conversion, exercise or exchange thereof” shall be equal to (A) the sum of (1) the lowest amount of consideration
(if any) received or receivable by the Company with respect to one Convertible Securities Share upon the issuance or sale of the Convertible
Security and upon conversion, exercise or exchange of such Convertible Security and (2) the lowest conversion price set forth in
such Convertible Security for which one Convertible Securities Share is issuable upon conversion, exercise or exchange thereof, minus
(B) the sum of all amounts paid or payable to the holder of such Convertible Security (or any other Person), with respect to any
one Convertible Securities Share, upon the issuance or sale of such Convertible Security plus the value of any other consideration received
or receivable by, or benefit conferred on, the holder of such Convertible Security (or any other Person), with respect to any one Convertible
Securities Share. Except as contemplated below, no further adjustment of the Exercise Price shall be made upon the actual issuance of
such Convertible Securities Share upon conversion, exercise or exchange of such Convertible Securities, and if any such issue or sale
of such Convertible Securities is made upon exercise of any Options for which adjustment of the Exercise Price has been or is to be made
pursuant to other provisions of this Section 3(b), except as contemplated below, no further adjustment of the Exercise Price shall be
made by reason of such issue or sale.
iii. Change
in Option Price or Rate of Conversion. If, during the Adjustment Period, the purchase or exercise price provided for in any Options,
the additional consideration, if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate
at which any Convertible Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases
at any time (other than proportional changes in conversion or exercise prices, as applicable, in connection with an event referred to
in Section 3(a)), the Exercise Price in effect at the time of such increase or decrease shall be adjusted to the Exercise Price which
would have been in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase price,
additional consideration or increased or decreased conversion rate, as the case may be, at the time initially granted, issued or sold.
For purposes of this Section 3(b)(iii), if the terms of any Option or Convertible Security that was outstanding as of the date of issuance
of this Warrant are increased or decreased in the manner described in the immediately preceding sentence, then such Option or Convertible
Security and the Convertible Securities Shares deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been
issued as of the date of such increase or decrease. No adjustment pursuant to this Section 3(b) shall be made if such adjustment would
result in an increase of the Exercise Price then in effect.
iv. Calculation
of Consideration Received. If any Option or Convertible Security is issued in connection with the issuance or sale or deemed issuance
or sale of any other securities of the Company (the “Primary Security”, and such Option or Convertible Security, the
“Secondary Securities” and together with the Primary Security, each a “Unit”), together comprising
one integrated transaction, the aggregate consideration per share of Common Stock with respect to such Primary Security shall be deemed
to be the lowest of (x) the purchase price of such Unit, (y) if such Primary Security is an Option and/or Convertible Security,
the lowest price per share for which one share of Common Stock is at any time issuable upon the exercise or conversion of the Primary
Security in accordance with Section 3(f)(i) or 3(f)(ii) above and (z) the lowest VWAP of the shares of Common Stock on any Trading
Day during the five Trading Day period (the “Adjustment Period”) immediately following the public announcement of such
Dilutive Issuance (for the avoidance of doubt, if such public announcement is released prior to the opening of the Principal Market on
a Trading Day, such Trading Day shall be the first Trading Day in such five Trading Day period). If any shares of Common Stock, Options
or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor will
be deemed to be the net amount of cash received by the Company therefor and if this Warrant is exercised on any given Exercise Date during
any such Adjustment Period, the Holder may elect to earlier end the Adjustment Period (including, solely with respect to such portion
of this Warrant exercised on such applicable Exercise Date). If any shares of Common Stock, Options or Convertible Securities are issued
or sold for a consideration other than cash, the amount of such consideration received by the Company will be the fair value of such consideration,
except where such consideration consists of publicly traded securities, in which case the amount of consideration received by the Company
for such securities will be the arithmetic average of the VWAPs of such security for each of the five (5) Trading Days immediately
preceding the date of receipt. If any shares of Common Stock, Options or Convertible Securities are issued to the owners of the non-surviving entity
in connection with any merger in which the Company is the surviving entity, the amount of consideration therefor will be deemed to be
the fair market value of such portion of the net assets and business of the non-surviving entity as is attributable to such
shares of Common Stock, Options or Convertible Securities (as the case may be). The fair market value of any consideration other than
cash or publicly traded securities will be determined jointly by the Company and the Holder. If such parties are unable to reach agreement
within ten (10) days after the occurrence of an event requiring valuation (the “Valuation Event”), the fair market
value of such consideration will be determined within five (5) Trading Days after the tenth (10th) day following such Valuation Event
by an independent, reputable appraiser jointly selected by the Company and the Holder. The determination of such appraiser shall be final
and binding upon all parties absent manifest error and the fees and expenses of such appraiser shall be borne by the Company.
b) Record
Date. If, during the Adjustment Period, the Company takes a record of the holders of the shares of Common Stock for the purpose of
entitling them (A) to receive a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities
or (B) to subscribe for or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed
to be the date of the issue or sale of shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend
or the making of such other distribution or the date of the granting of such right of subscription or purchase (as the case may be).
c) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells
any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any
class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number
of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including
without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance
or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are
to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s
right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder
shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as
a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until
such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
d) Pro
Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution
of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including,
without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification,
corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after
the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent
that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise
of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation)
immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the
record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however,
that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial
Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership
of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance
for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership
Limitation).
e) Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions
effects any merger or consolidation of the Company with or into another Person, (ii) the Company (or any Subsidiary), directly or indirectly,
effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in
one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the
Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares
for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock or 50% or
more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in one or more related transactions
effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which
the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly,
in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby
such other Person or group acquires 50% or more of the outstanding shares of Common Stock or 50% or more of the voting power of the common
equity of the Company (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the
Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to
the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the
exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is
the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result
of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately
prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes
of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration
based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and
the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value
of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash
or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary, in the
event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s or the Successor
Entity’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction
(or, if later, the date of the public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder
by paying to the Holder an amount of cash equal to the Black Scholes Value (as defined below) of the remaining unexercised portion of
this Warrant on the date of the consummation of such Fundamental Transaction; provided, however, that, if the Fundamental
Transaction is not within the Company’s control, including not approved by the Company’s Board of Directors, the Holder shall
only be entitled to receive from the Company or any Successor Entity, upon or following the date of consummation of such Fundamental
Transaction, the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion
of this Warrant, that is being offered and paid to the holders of Common Stock of the Company in connection with the Fundamental Transaction,
whether that consideration be in the form of cash, stock or any combination thereof, or whether the holders of Common Stock are given
the choice to receive from among alternative forms of consideration in connection with the Fundamental Transaction; provided,
further, that if holders of Common Stock of the Company are not offered or paid any consideration in such Fundamental Transaction,
such holders of Common Stock will be deemed to have received common stock of the Successor Entity (which Entity may be the Company following
such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant
based on the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of
consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding
to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the applicable contemplated Fundamental
Transaction and the Termination Date, (B) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from
the HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following the public
announcement of the applicable contemplated Fundamental Transaction, (C) the underlying price per share used in such calculation shall
be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if
any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading Day immediately
preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicable Fundamental
Transaction, if earlier) and ending on the Trading Day of the earlier of the Holder’s or the Successor Entity’s request pursuant
to this Section 3(d) and (D) a remaining option time equal to the time between the date of the public announcement of the applicable
contemplated Fundamental Transaction and the Termination Date and (E) a zero cost of borrow. The payment of the Black Scholes Value will
be made by wire transfer of immediately available funds (or such other consideration) within the later of (i) five Business Days of the
earlier of the Holder’s or the Successor Entity’s election and (ii) the date of consummation of the Fundamental Transaction.
Unless the Holder or the Successor Entity has elected for this Warrant to be purchased for its Black
Scholes Value on or prior to the consummation of a Fundamental Transaction as contemplated hereby, the Company shall cause any successor
entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in
writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions
of this Section 3(d) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder
(without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange
for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to
this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity)
equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on
the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder
to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental
Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the
purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and
which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor
Entity shall succeed and be substituted for the term “Company” under this Warrant (so that from and after the occurrence
or consummation of such Fundamental Transaction, each and every provision of this Warrant and the other Transaction Documents referring
to the “Company” shall refer instead to each of the Successor Entity or Successor Entities, jointly and severally), and the
Successor Entity or Successor Entities, jointly and severally, may exercise every right and power of the Company prior thereto and the
Successor Entity or Successor Entities shall assume all of the obligations of the Company prior thereto under this Warrant and the other
Transaction Documents with the same effect as if such Successor Entity or Successor Entities, jointly and severally, had been named as
the Company herein.
f) Calculations.
All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the
number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
g) Notice
to Holder.
i. Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly
deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number
of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii. Notice
to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common
Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall
authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock
of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification
of the Common Stock, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer of
all or substantially all of its assets, or any compulsory share exchange whereby the Common Stock is converted into other securities,
cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its email address as it shall appear
upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified,
a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants,
or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer
or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of
record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in
the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that
any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries,
the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain
entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering
such notice except as may otherwise be expressly set forth herein.
h) Share
Combination Event Adjustment. In addition to the adjustments set forth in Section 3(a), subject to Stockholder Approval, if at
any time and from time to time on or after the Issuance Date until the three-year anniversary of the Issue Date, there occurs any share
split, reverse share split, share dividend, share combination recapitalization or other similar transaction involving the Common Stock
(each, a “Share Combination Event”, and such date thereof, the “Share Combination Event Date”) and
the lowest VWAP during the 5 consecutive Trading Days commencing on the Share Combination Event Date (the “Event Market Price”)
(provided if the Share Combination Event is effective after close of Trading on the primary Trading Market, then commencing on the next
Trading Day which period shall be the “Share Combination Adjustment Period”) is less than the Exercise Price then in
effect (after giving effect to the adjustment in clause 3(a) above), then, as permitted by the rules and regulations of the Trading Market,
at the close of trading on the primary Trading Market on the last day of the Share Combination Adjustment Period, the Exercise Price then
in effect on such fifth (5th) Trading Day shall be reduced (but in no event increased) to the Event Market Price and the number of Warrant
Shares issuable upon exercise of this Warrant hereunder (such resulting number, the “Share Combination Issuable Shares”)
shall be increased such that the aggregate Exercise Price payable hereunder, after taking into account the decrease in the Exercise Price,
shall be equal to the aggregate Exercise Price on the Issuance Date (adjusted for any Warrants exercised or sold by the Holder prior to
such Share Combination Event Date) for the Warrant Shares then outstanding; provided, however, that in no event shall the Event Market
Price be lower than the Floor Price; and provided further that notwithstanding the foregoing, if one or more Share Combination Events
occurred prior to the Stockholder Approval being obtained and the reduction of the Exercise Price was limited by clause (i) of the definition
of Floor Price, once the Stockholder Approval is obtained, the Exercise Price will automatically be reduced to equal the greater of (x)
the lowest Event Market Price with respect to any Share Combination Event that occurred prior to the Stockholder Approval being obtained,
and (y) the price determined by reference to clause (ii) of the definition of Floor Price. Notwithstanding the foregoing, if one or more
Share Combination Events occurs prior to the Stockholder Approval being obtained and the reduction of the Exercise Price to the Event
Market Price, once the Stockholder Approval is obtained, the Exercise Price will automatically be reduced to the lowest Event Market Price
with respect to any Share Combination Event that occurred prior to the Stockholder Approval being obtained and the Share Combination Issuable
Shares will automatically be adjusted to equal the highest such number with respect to any Share Combination Event that occurred prior
to the Stockholder Approval being obtained. For the avoidance of doubt, if the adjustment in the immediately preceding sentence would
otherwise result in an increase in the Exercise Price hereunder, no adjustment shall be made, and if this Warrant is exercised, on any
given Exercise Date during the Share Combination Adjustment Period, solely with respect to such portion of this Warrant exercised on such
applicable Exercise Date, such applicable Share Combination Adjustment Period shall be deemed to have ended on, and included, the Trading
Day immediately prior to such Exercise Date and the Event Market Price on such applicable Exercise Date will be the lowest VWAP of the
Common Stock immediately during such the Share Combination Adjustment Period prior to such Exercise Date and ending on, and including
the Trading Day immediately prior to such Exercise Date.
i) Voluntary
Adjustment By Company. Subject to the rules and regulations of the Trading Market on which the Common Stock is then listed, the Company
may at any time during the term of this Warrant, subject to the prior written consent of the Holder, reduce the then current Exercise
Price to any amount and for any period of time deemed appropriate by the board of directors of the Company.
j) Stockholder
Approval. The Company shall hold a special meeting of stockholders (which may also be at the annual meeting of stockholders) at the
earliest practicable date after the date hereof, but in no event later than one hundred (100) days after the Closing Date for the purpose
of obtaining Stockholder Approval, with the recommendation of the Company’s Board of Directors that such proposal be approved, and
the Company shall solicit proxies from its stockholders in connection therewith in the same manner as all other management proposals in
such proxy statement and all management-appointed proxyholders shall vote their proxies in favor of such proposal. Within fifteen (15)
days following the filing of the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2024, the Company shall
file with the Commission a preliminary proxy statement to request for the purpose of obtaining Stockholder Approval, and the Company shall
use its best efforts to obtain such Stockholder Approval. In the event Stockholder Approval does not occur, the Company will be required
to hold additional meetings at least one time every three (3) months until the earlier of the date Stockholder Approval is obtained or
the Warrants are no longer outstanding, with printed and mailed proxy statements sent to shareholders for such meetings. Notwithstanding
the foregoing, the Company may, in lieu of holding a special meeting of stockholders as aforesaid, obtain the written consent of a majority
of its stockholders covering the Stockholder Approval so long as prior to sixty (60) days after the Closing Date, such written consents
are obtained and in accordance with Exchange Act Rule 14c-2 at least twenty (20) days shall have transpired from the date on which a written
information statement containing the information specified in Schedule 14C detailing such Stockholder Approval shall have been filed with
the SEC and delivered to stockholders of the Company.
Section 4. Transfer
of Warrant.
a) Transferability.
Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to the provisions of
Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights)
are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent,
together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent
or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required,
such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable,
and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing
the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary,
the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full,
in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers
an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised
by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
b) New
Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company,
together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or
its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination,
the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice. All Warrants issued on transfers or exchanges shall be dated the Initial Exercise Date and shall be identical with this
Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c) Warrant
Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder
of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other
purposes, absent actual notice to the contrary.
d) Transfer
Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this
Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable
state securities or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions or current public information
requirements pursuant to Rule 144, the Company may require, as a condition of allowing such transfer, that the Holder or transferee of
this Warrant, as the case may be, comply with the provisions of Section 5.7 of the Purchase Agreement.
e) Representation
by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise
hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or
reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant
to sales registered or exempted under the Securities Act.
Section 5. Miscellaneous.
a) No
Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends
or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set
forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to
Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required
to net cash settle an exercise of this Warrant.
b) Loss,
Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case
of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include
the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make
and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.
c) Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted
herein shall not be a Trading Day, then such action may be taken or such right may be exercised on the next succeeding Trading Day.
d) Authorized
Shares.
The Company covenants
that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number
of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further
covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the
necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action
as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation,
or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares
which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented
by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable
and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously with such issue).
Except and to the
extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate
of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate
to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the
Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior
to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts
to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary
to enable the Company to perform its obligations under this Warrant.
Before taking any
action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price,
the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.
e) Jurisdiction.
All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance
with the provisions of the Purchase Agreement.
f) Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not
utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
g) Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as
a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this
Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results
in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder
in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
h) Notices.
Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in
accordance with the notice provisions of the Purchase Agreement.
i) Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase
price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the
Company.
j) Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any
action for specific performance that a remedy at law would be adequate.
k) Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder.
The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable
by the Holder or holder of Warrant Shares.
l) Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder; provided,
that the provisions of Section 2(e) of this Warrant may not be amended, modified or waived.
m) Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
n) Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
********************
(Signature Page Follows)
IN WITNESS WHEREOF, the Company
has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
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Zoomcar Holdings, Inc. |
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By: |
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Name: |
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Title: |
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NOTICE OF EXERCISE
To: | Zoomcar Holdings, Inc. |
(1) The
undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised
in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2) Payment
shall take the form of (check applicable box):
| ☐ | in lawful money of the United States; or |
| ☐ | if permitted the
cancellation of such number of Warrant Shares as is necessary, in accordance with the formula
set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number
of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection
2(c).1 |
(3) Please
issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
_______________________________
The Warrant Shares shall be delivered to the following
DWAC Account Number:
_______________________________
_______________________________
_______________________________
(4) Accredited Investor.
The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.
[SIGNATURE
OF HOLDER]
Name of Investing Entity: |
_______________________________ |
Signature of Authorized Signatory of Investing Entity: |
_______________________________ |
Name of Authorized Signatory: |
_______________________________ |
Title of Authorized Signatory: |
_______________________________ |
Date: |
_______________________________ |
| 1 | NTD: How will alternative cashless exercise be effected? |
EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this
form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and
all rights evidenced thereby are hereby assigned to
Name: |
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(Please Print) |
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Address: |
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(Please Print) |
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Phone Number: |
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Email Address: |
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Dated: _______________ __, ______ |
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Holder’s Signature:______________________ |
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Holder’s Address:_______________________ |
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20
Exhibit 10.1
SECURITIES
PURCHASE AGREEMENT
This
Securities Purchase Agreement (this “Agreement”) is dated as of June [●], 2024, between Zoomcar Holdings, Inc.,
a Delaware corporation (the “Company”) and each purchaser identified on the signature pages hereto (each, including
its successors and assigns, a “Purchaser” and collectively, the “Purchasers”).
WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act (as defined below),
and Rule 506 promulgated thereunder, the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly,
desires to purchase from the Company, securities of the Company as more fully described in this Agreement.
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:
ARTICLE
I.
DEFINITIONS
1.1 Definitions.
In addition to the terms defined elsewhere in this Agreement: (a) capitalized terms that are not otherwise defined herein have the meanings
given to such terms in the Notes (as defined herein), and (b) the following terms have the meanings set forth in this Section 1.1:
“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.7.
“Action”
shall have the meaning ascribed to such term in Section 3.1(j).
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Board
of Directors” means the board of directors of the Company.
“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized
or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee”
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority
so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally
open for use by customers on such day.
“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1.
“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties
thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s
obligations to deliver the Securities, in each case, have been satisfied or waived.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such
securities may hereafter be reclassified or changed.
“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Common
Warrants” means, collectively, the Common Stock purchase warrants delivered to the Purchasers at the Closing in accordance
with Section 2.2(a) hereof, in the form of Exhibit A attached hereto.
“Company
Counsel” means Ellenoff Grossman & Schole LLP.
“Data
Privacy and Security Laws” shall have the meaning ascribed to such term in Section 3.1(mm).
“Disclosure
Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.
“Disclosure
Time” means, (i) if this Agreement is signed on a day that is not a Trading Day or after 9:00 a.m. (New York City time) and
before midnight (New York City time) on any Trading Day, 9:01 a.m. (New York City time) on the Trading Day immediately following the
date hereof, unless otherwise instructed as to an earlier time by the Placement Agent, and (ii) if this Agreement is signed between midnight
(New York City time) and 9:00 a.m. (New York City time) on any Trading Day, no later than 9:01 a.m. (New York City time) on the date
hereof, unless otherwise instructed as to an earlier time by the Placement Agent.
“Escrow
Agent” means Continental Stock Transfer & Trust Company, with offices at 1 State Street, 30th Floor, New York, NY 10004.
“Escrow
Agreement” means the escrow agreement entered into prior to the date hereof, by and among the Company, the Escrow Agent and
the Placement Agent pursuant to which the Purchasers shall deposit Subscription Amounts with the Escrow Agent to be applied to the transactions
contemplated hereunder.
“Evaluation
Date” shall have the meaning ascribed to such term in Section 3.1(s).
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.
“GAAP”
shall have the meaning ascribed to such term in Section 3.1(h).
“Indebtedness”
shall have the meaning ascribed to such term in the Notes.
“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(p).
“IT
Systems” shall have the meaning ascribed to such term in Section 3.1(mm).
“Legend
Removal Date” shall have the meaning ascribed to such term in Section 4.1(c).
“Lien”
means any lien, mortgage, pledge, assignment, security interest, charge or encumbrance of any kind (including any agreement to give any
of the foregoing, any conditional sale or other title retention agreement, and any lease in the nature thereof) and any option, trust
or other preferential arrangement having the practical effect of any of the foregoing.
“Lock-Up
Agreement” means the Lock-Up Agreement, dated as of the date hereof, by and among the Company and each of the directors, executive
officers, employees and stockholders holding at least five percent (5%) of the outstanding shares of Common Stock on a fully converted
basis as set forth on Schedule 1.1, in the form of Exhibit B attached hereto.
“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).
“Material
Permits” shall have the meaning ascribed to such term in Section 3.1(n).
“Maximum
Rate” shall have the meaning ascribed to such term in Section 5.17.
“Notes”
means the Original Issue Discount Notes, issued by the Company to the Purchasers hereunder, in the form of Exhibit C attached
hereto.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Personal
Data” shall have the meaning ascribed to such term in Section 3.1(mm).
“Placement
Agent” means Aegis Capital Corp.
“Placement
Agent Agreement” means the placement agent agreement, dated on or about the date hereof, between the Company and the Placement
Agent.
“Placement
Agent Warrants” means, collectively, the Common Stock purchase warrants delivered to the Placement Agent at the Closing in
accordance with placement agent agreement dated on the same date hereof between the Company and the Placement Agent.
“Principal
Amount” means, as to each Purchaser, the amounts set forth below such Purchaser’s signature block on the signature pages
hereto next to the heading “Principal Amount,” in United States Dollars, which shall equal such Purchaser’s Subscription
Amount multiplied by 1.2.
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.
“Processing”
shall have the meaning ascribed to such term in Section 3.1(mm).
“Public
Information Failure” shall have the meaning ascribed to such term in Section 4.3(b).
“Public
Information Failure Payments” shall have the meaning ascribed to such term in Section 4.3(b).
“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.10.
“Registration
Rights Agreement” means the Registration Rights Agreement, dated as of the date hereof, by and among the Company and the Purchaser
Parties, in the form of Exhibit C attached hereto.
“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).
“Required
Holders” means (I) prior to the Closing Date, each of the Purchasers and (II) on or after the Closing Date, holders of at least
a majority of the aggregate Principal Amount of Notes issued.
“Required
Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock then issued or potentially issuable
in the future pursuant to the Transaction Documents, including any Underlying Shares issuable upon exercise in full of all Warrants,
ignoring any exercise limits set forth therein.
“Resale
Effective Date” means the earliest of the date that (a) the initial Resale Registration Statement registering for resale all
Warrant Shares has been declared effective by the Commission, (b) all of the Warrant Shares have been sold pursuant to Rule 144 or may
be sold pursuant to Rule 144 without the requirement for the Company to be in compliance with the current public information required
under Rule 144 and without volume or manner-of-sale restrictions, (c) following the one year anniversary of the Closing Date provided
that a holder of Warrant Shares is not an Affiliate of the Company, or (d) all of the Warrant Shares may be sold pursuant to an exemption
from registration under Section 4(a)(1) of the Securities Act without volume or manner-of-sale restrictions and Company Counsel has delivered
to such holders a standing written unqualified opinion that resales may then be made by such holders of the Warrant Shares pursuant to
such exemption which opinion shall be in form and substance reasonably acceptable to such holders.
“Resale
Registration Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement
and covering the resale by the Purchasers of the Securities.
“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to
time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.
“Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect
as such Rule.
“SEC
Reports” shall have the meaning ascribed to such term in Section 3.1(h).
“Securities”
means the Notes, the Warrants and the Underlying Shares.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be
deemed to include locating and/or borrowing shares of Common Stock).
“Standard
Settlement Period” shall have the meaning ascribed to such term in Section 4.1(c).
“Stockholder
Approval” means such approval as may be required by the applicable rules and regulations of The Nasdaq Stock Market LLC (or
any successor entity) from the shareholders of the Company or board of directors in lieu thereof: (a) to approve the “alternative
cashless exercise” provision in Section 2(c) of the Warrant, (b) to render inapplicable the Floor Price in Section 3(b) of the
Warrants, thereby giving full effect to the adjustment in the Exercise Price and/or number of shares of Common Stock underlying the Warrants
following any Dilutive Issuance, (c) to consent to any adjustment to the exercise price and/or number of shares of Common Stock underlying
the Warrants in the event of a Share Combination Event in Section 3(h) of the Warrants, and (d) to consent to any adjustment to the exercise
price of the Warrants in the event of a voluntary adjustment pursuant to Section 3(i) of the Warrants.
“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for Notes and Warrants purchased hereunder as specified
below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,”
in United States dollars and in immediately available funds.
“Subsidiary”
means any subsidiary of the Company as set forth in the SEC Reports and shall, where applicable, also include any direct or indirect
subsidiary of the Company formed or acquired after the date hereof.
“Trading
Day” means a day on which the principal Trading Market is open for trading.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange, the OTCQB or the OTCQX (or any successors to any of the foregoing).
“Transaction
Documents” means this Agreement, the Notes, the Warrants, the Registration Rights Agreement, the Placement Agent Agreement
and all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions
contemplated hereunder.
“Transfer
Agent” means Equiniti Trust Company, LLC, the current transfer agent of the Company, with a mailing address of [●], and
any successor transfer agent of the Company.
“Underlying
Shares” means the Warrant Shares, without regard to any limitation or restriction on the exercise of the Warrants.
“Variable
Rate Transaction” means a transaction in which the Company (i) issues or sells any shares of Common Stock or Common Stock Equivalents
either (A) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading
prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities or (B)
with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt
or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company
or the market for the Common Stock, other than in connection with customary anti-dilution adjustments resulting from future stock splits,
stock dividends or similar transactions, or (ii) issues or sells any amortizing convertible security that amortizes prior to its maturity
date, whereby it is required to or has the option to (or the investor in such security has the option to require the Company to) make
such amortization payments in Common Stock (whether or not such payments in stock are subject to certain equity conditions) or (iii)
enters into, or effects a transaction under, any agreement, including, but not limited to, an equity line of credit or “at-the-market”
offering, whereby it may sell securities at a future determined price, regardless of whether shares pursuant to such agreement have actually
been issued and regardless of whether such agreement is subsequently canceled, provided that any issuance of Warrant Shares upon the
exercise of the Warrants issuable hereunder will not be deemed a Variable Rate Transaction. Notwithstanding anything herein to the contrary,
Variable Rate Transaction shall not include raising capital through a registered offering of fixed price securities such as a PIPE or
Follow-On offering.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted
average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock
is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market
(or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common
Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the Required Holders then outstanding and reasonably acceptable to the Company, the fees and expenses of which
shall be paid by the Company.
“Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Warrants.
“Warrants”
means, collectively, the Common Warrants and Placement Agent Warrants.
ARTICLE
II.
PURCHASE
AND SALE
2.1 Closing.
On the Closing Date, upon the terms and subject to the conditions set forth herein, the Company agrees to sell, and the Purchasers, severally
and not jointly, agree to purchase, up to an aggregate of $3,000,000 in principal amount of the Notes. Each Purchaser shall deliver to
the Escrow Agent, via wire transfer , immediately available funds equal to such Purchaser’s Subscription Amount as set forth on
the signature page hereto executed by such Purchaser, and the Company shall deliver to each Purchaser its respective Note and a Warrant,
as determined pursuant to Section 2.2(a), and the Company and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable
at the Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall take place remotely
by electronic transfer of the Closing documentation.
2.2 Deliveries.
(a) On
or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:
(i)
this Agreement duly executed by the Company;
(ii) a
legal opinion of Company Counsel, in form and substance reasonably satisfactory to each of the Purchasers and the Placement Agent;
(iii) a
Note with a principal amount equal to such Purchaser’s Subscription Amount multiplied by 1.2, registered in the name of such Purchaser;
(iv) a
Common Warrant registered in the name of such Purchaser to purchase up to a number of shares of Common Stock as set forth on such Purchaser’s
signature page attached hereto, which shall equal 250% warrant coverage determined by multiplying the Purchaser’s Subscription
Amount by 2.5 and dividing the resulting product by the “Minimum Price” as such term is defined on the Trading Market, with
an exercise price equal to $[●], subject to adjustment therein;
(v) the
Company shall have provided each Purchaser with the wire instructions of the Company, on Company letterhead and executed by the Chief
Executive Officer or Chief Financial Officer;
(vi) the
Registration Rights Agreement; and
(vii) the
Lock-Up Agreements.
(b) On
or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company or the Escrow Agent, as applicable,
the following:
(i)
this Agreement duly executed by such Purchaser;
(ii)
the Registration Rights Agreement; and
(iii)
such Purchaser’s Subscription Amount by wire transfer to the account specified in writing by the Company.
2.3 Closing
Conditions.
(a) The
obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:
(i) the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality, in all respects) on
the Closing Date of the representations and warranties of the Purchasers contained herein (unless as of a specific date therein in which
case they shall be accurate in all material respects (or, to the extent representations or warranties are qualified by materiality, in
all respects) as of such date);
(ii) all
obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been performed;
and
(iii) the
delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.
(b) The
respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being met:
(i) the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect,
in all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein (unless as of
a specific date therein in which case they shall be accurate in all material respects or, to the extent representations or warranties
are qualified by materiality or Material Adverse Effect, in all respects) as of such date;
(ii) all
obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;
(iii) the
delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;
(iv) there
shall have been no Material Adverse Effect with respect to the Company since the date hereof;
(v) filing
of a listing application from the Nasdaq Capital Market describing the issuance of the Warrants and Underlying Shares in accordance with
the terms of the Transaction Documents; and
(vi)
from the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or the Company’s
principal Trading Market and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall
not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such
service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities
nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such
magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of
such Purchaser, makes it impracticable or inadvisable to purchase the Securities at the Closing.
ARTICLE
III.
REPRESENTATIONS
AND WARRANTIES
3.1 Representations
and Warranties of the Company. Except as set forth in the Disclosure Schedules, which Disclosure Schedules shall be deemed a part
hereof and shall qualify any representation made herein to the extent of the disclosure contained in the corresponding section of the
Disclosure Schedules, and any other section hereof to the extent that it is readily apparent from a reading of such disclosure that it
also qualifies or applies to such other sections, the Company hereby makes the following representations and warranties to each Purchaser:
(a) Subsidiaries.
All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1(a). The Company owns, directly or indirectly,
all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding
shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights
to subscribe for or purchase securities.
(b) Organization
and Qualification. Except as set forth on Schedule 3.1(b), the Company and each of the Subsidiaries is an entity duly incorporated
or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization,
with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.
Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles
of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to
conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing,
as the case may be, would not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or
enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects
or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the
Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i),
(ii) or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction revoking,
limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.
(c) Authorization;
Enforcement.
(i) The
Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement
and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery
of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated
hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by
the Company, the Board of Directors or the Company’s stockholders in connection herewith or therewith other than in connection
with the Required Approvals. This Agreement and each other Transaction Document to which it is a party has been (or upon delivery will
have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid
and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general
equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies, and / or (iii) insofar as indemnification and contribution provisions may be limited by applicable
law.
(d) No
Conflicts. Other than as set forth on Schedule 3.1(d), the execution, delivery and performance by the Company of this Agreement
and the other Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the
transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or
any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) subject
to the Required Approvals, conflict with, or constitute a default (or an event that with notice or lapse of time or both would become
a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to
others any rights of termination, amendment, anti-dilution or similar adjustments, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise)
or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary
is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary
is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary
is bound or affected; except in the case of each of clauses (ii) and (iii), such as would not have or reasonably be expected to result
in a Material Adverse Effect.
(e) Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to,
or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in
connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings required
pursuant to Section 4.6 of this Agreement, (ii) the filing with the Commission of the Resale Registration Statement pursuant to the Registration
Rights Agreement, (iii) the Stockholder Approval, (iv) the notice and/or application(s) to each applicable Trading Market for the issuance
and sale of the Securities and the listing of the Underlying Shares for trading thereon, (v) the filing of Form D with the Commission
and such filings as are required to be made under applicable state securities laws and (vi) the consents that shall be obtained prior
to Closing (collectively, the “Required Approvals”).
(f) Issuance
of the Securities. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than
restrictions on transfer provided for in the Transaction Documents or under federal or state securities laws. The Underlying Shares,
when issued in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable, free and
clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents. The Company
has reserved from its duly authorized capital stock a number of shares of Common Stock for issuance of the Underlying Shares at least
equal to the Required Minimum on the date hereof.
(g) Capitalization.
The capitalization of the Company as of the date hereof is as set forth on Schedule 3.1(g), which Schedule 3.1(g) shall also include
the number of shares of Common Stock owned beneficially, and of record, by Affiliates of the Company as of the date hereof. Other than
as stated in Schedule 3.1(g), the Company has not issued any capital stock since its most recently filed periodic report under the Exchange
Act, other than pursuant to the exercise of employee stock options under the Company’s stock award plans, the issuance of shares
of Common Stock or stock options to employees, directors and consultants pursuant to the Company’s employee stock award plans and
pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic
report under the Exchange Act. Except as set forth on Schedule 3.1(g), no Person has any right of first refusal, preemptive right, right
of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as set forth
on Schedule 3.1(g), there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right
to subscribe for or acquire, any shares of Common Stock or the capital stock of any Subsidiary, or contracts, commitments, understandings
or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock
Equivalents or capital stock of any Subsidiary. Except as set forth on Schedule 3.1(g), the issuance and sale of the Securities will
not obligate the Company or any Subsidiary to issue shares of Common Stock or other securities to any Person (other than the Purchasers).
Except as set forth on Schedule 3.1(g), there are no outstanding securities or instruments of the Company or any Subsidiary with
any provision that adjusts the exercise, conversion, exchange or reset price of such security or instrument upon an issuance of securities
by the Company or any Subsidiary. Except as set forth on Schedule 3.1(g), there are no outstanding securities or instruments of the Company
or any Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements
by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. Except as set forth
on Schedule 3.1(g), the Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any
similar plan or agreement. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid
and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was
issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. Other than the Required Approvals,
no further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the
Securities. There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital
stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.
(h) SEC
Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be
filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two
years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the
foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein
as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any
such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material
respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained
any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the
Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance
with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and
its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.
(i) Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within
the SEC Reports, except as set forth on Schedule 3.1(i), (i) there has been no event, occurrence or development that has had or that
would reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or
otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice
and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings
made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend
or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any
shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant
to existing Company stock award plans. The Company does not have pending before the Commission any request for confidential treatment
of information (excluding redactions permitted by Item 6.01 of Regulation S-K). Except for the issuance of the Securities contemplated
by this Agreement, no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected
to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, prospects, properties, operations,
assets or financial condition, that would be required to be disclosed by the Company under applicable securities laws at the time this
representation is made or deemed made that has not been publicly disclosed prior to the date that this representation is made.
(j) Litigation.
Except as set forth on Schedule 3.1(j), there is no action, suit, proceeding or investigation pending against or affecting the Company,
any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory
authority (federal, state, county, local or foreign) (collectively, an “Action”) that (i) adversely affects or challenges
the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) would, if there were an unfavorable
decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director
or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities
laws or a claim of breach of fiduciary duty. Except as set forth on Schedule 3.1(j), there has not been, and to the knowledge of the
Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current director or officer
of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement
filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.
(k) Labor
Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company,
which would reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees
is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company
nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their
relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary,
is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary
information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third
party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability
with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state, local
and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours,
except where the failure to be in compliance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect.
(l) Compliance.
Except as set forth in Schedule 3.1(l), neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event
has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary
under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any
indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties
is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court,
arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any
governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection,
occupational health and safety, product quality and safety and employment and labor matters, except in each case as would not have or
reasonably be expected to result in a Material Adverse Effect.
(m) Environmental
Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating to pollution
or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata),
including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as
all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders,
permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have
received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses;
and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and
(iii), the failure to so comply would be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.
(n) Regulatory
Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except
where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or
modification of any Material Permit.
(o) Title
to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them and good
and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in
each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment
of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and, the payment of
which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries
are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance.
(p) Intellectual
Property. Except as set forth on Schedule 3.1(p), the Company and its Subsidiaries exclusively own (free and clear of all liens,
encumbrances and defects) or possess a valid license or other lawful right to use all Intellectual Property Rights necessary, used or
held for use to conduct its business as presently conducted and as presently proposed to be conducted. Each item of such Intellectual
Property Rights is valid and enforceable. Each of the licenses (in-bound or out-bound) of Intellectual Property Rights or other contracts
(including settlement agreements) is valid and enforceable, and none of the Company or its Subsidiaries and, to the knowledge of the
Company and its Subsidiaries, none of the counterparties to any such contract, is in default or breach thereunder or thereof. The conduct
of the business of the Company and its Subsidiaries does not infringe, misappropriate or otherwise violate or conflict with the Intellectual
Property Rights of others. To the knowledge of the Company and its Subsidiaries, no third party is infringing, misappropriating or otherwise
conflicting with its Intellectual Property Rights. Except as set forth on Schedule 3.1(p), none of the Company or its Subsidiaries are
aware of any facts or circumstances which might give rise to any of the foregoing infringements, misappropriations or other conflicts,
or claims, actions or proceedings. Each of the Company and its Subsidiaries has taken reasonable measures to protect the secrecy, confidentiality
and value of all of its Intellectual Property Rights, as applicable, and, to its knowledge, no unauthorized disclosure of any information
comprising any Intellectual Property Rights has occurred. All present and former employees, consultants and independent contractors of
each of the Company and its Subsidiaries that have been involved in the development of any Intellectual Property Rights used in the business
of the Company and its Subsidiaries have entered into written agreements under which such Persons (A) agree to protect the trade secrets,
know-how and other confidential information of the Company and its Subsidiaries, as applicable, and (B) assign to one of the Company
or its Subsidiaries, as applicable, all right, title and interest in and to all Intellectual Property Rights created by such Person in
the course of his, her or its employment or other engagement by the Company or any of its Subsidiaries. For purposes of this Agreement,
“Intellectual Property Rights” means all intellectual property and proprietary rights, including all (i) trademarks,
trade names, service marks, service names, domain names, and other designation of origin, together with all goodwill associated therewith,
(ii) original works of authorship and copyrights, (iii) patents and patent applications, together with all divisionals, continuations,
continuations-in-part, reissues and reexaminations thereof, including all rights to file applications for patent, (iv) trade secrets,
know-how and other confidential information, (v) software, including data, databases and documentation therefor, and (vi) inventions,
licenses, approvals and governmental authorizations.
(q) Insurance.
The Company and the Subsidiaries do not maintain any insurance coverage related to the business and operations of the Company and its
Subsidiaries. The Company maintains directors and officers insurance coverage and employee health and term insurance. Neither the Company
nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase
in cost.
(r) Transactions
with Affiliates and Employees. Except as set forth on Schedule 3.1(r), none of the officers or directors of the Company or any Subsidiary
and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction
with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement
or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from
providing for the borrowing of money from or lending of money to, or otherwise requiring payments to or from any officer, director or
such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000 other than for (i) payment
of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other
employee benefits, including stock option agreements under any stock award plan of the Company.
(s) Sarbanes-Oxley;
Internal Accounting Controls. Except as set forth on Schedule 3.1(s), the Company and the Subsidiaries are in compliance in all material
respects with any and all applicable requirements of the Sarbanes-Oxley Act of 2002, as amended, that are effective as of the date hereof,
and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and
as of the Closing Date. Except as set forth on Schedule 3.1(s), the Company and the Subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general
or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with
GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or
specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences. Except as set forth on Schedule 3.1(s), the Company and the Subsidiaries
have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the
Subsidiaries and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company
in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified
in the Commission’s rules and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure
controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report
under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic
report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures
based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over
financial reporting (as such term is defined in the Exchange Act) that have materially affected, or is reasonably likely to materially
affect, the internal control over financial reporting of the Company and its Subsidiaries.
(t) Certain
Fees. Except for fees payable by the Company to the Placement Agent, no brokerage or finder’s fees or commissions are or will
be payable by the Company or any Subsidiaries to any broker, financial advisor or consultant, finder, placement agent, investment banker,
bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Purchasers shall have no obligation
with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this
Section that may be due in connection with the transactions contemplated by the Transaction Documents.
(u) Private
Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, no registration
under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers as contemplated hereby.
The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market.
(v) Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will not be
or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The
Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration
under the Investment Company Act of 1940, as amended.
(w) Registration
Rights. Except for the Registration Rights Agreement and as disclosed on Schedule 3.1(w), no Person has any right to cause the Company
or any Subsidiary to effect the registration under the Securities Act of any securities of the Company or any Subsidiary.
(x) Listing
and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company
has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common
Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration.
Except as set forth on Schedule 3.1(x), the Company has not, in the 12 months preceding the date hereof, received notice from any Trading
Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing
or maintenance requirements of such Trading Market. The Common Stock is currently eligible for electronic transfer through the Depository
Trust Company or another established clearing corporation and the Company is current in payment of the fees to the Depository Trust Company
(or such other established clearing corporation) in connection with such electronic transfer.
(y) Application
of Takeover Protections. Assuming the accuracy of the representations and warranties of Purchasers in Section 3.2(h), the Company
and the Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s
certificate of incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable
to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or exercising their rights under the Transaction
Documents, including without limitation as a result of the Company’s issuance of the Securities and the Purchasers’ ownership
of the Securities.
(z) Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms
that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any information
that it believes constitutes or might constitute material, non-public information for purposes of U.S. federal securities laws. The Company
understands and confirms that the Purchasers will rely on the foregoing representation in effecting transactions in securities of the
Company. All of the disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company and its Subsidiaries,
their respective businesses and the transactions contemplated hereby, including the Disclosure Schedules, is true and correct in all
material respects and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order
to make the statements made therein, in the light of the circumstances under which they were made and when made, not misleading. The
press releases disseminated by the Company during the twelve months preceding the date of this Agreement taken as a whole do not contain
any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they were made and when made, not misleading. The Company acknowledges
and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby
other than those specifically set forth in Section 3.2 hereof.
(aa) No
Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, neither
the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities
to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would require the registration of any
such securities under the Securities Act, or (ii) any applicable shareholder approval provisions of any Trading Market on which any of
the securities of the Company are listed or designated.
(bb) Solvency.
Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the Company
of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s assets will not exceed
the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known
contingent liabilities) as they mature, (ii) the Company’s assets will continue to constitute unreasonably small capital to carry
on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital
requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability thereof,
and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its
assets (at the carrying value of such assets in the SEC Reports), after taking into account all anticipated uses of the cash, would not
be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid. Schedule 3.1(bb) sets
forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company
or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness” means (x) any liabilities for borrowed
money or amounts owed in excess of $25,000 (other than trade accounts payable incurred in the ordinary course of business), (y) all guaranties,
endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected
in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments
for deposit or collection or similar transactions in the ordinary course of business; and (z) the present value of any lease payments
in excess of $25,000 due under leases required to be capitalized in accordance with GAAP. Except as set forth on Schedule 3.1(bb), neither
the Company nor any Subsidiary is in default with respect to any Indebtedness.
(cc) Tax
Status. Except as set forth on Schedule 3.1(cc), the Company and its Subsidiaries each (i) has made or filed all United States
federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction
to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for
the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are
no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company
or of any Subsidiary know of no basis for any such claim.
(dd) No
General Solicitation. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of the Securities
by any form of general solicitation or general advertising. The Company has offered the Securities for sale only to the Purchasers and
certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.
(ee) Foreign
Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other
person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds,
(iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of
which the Company is aware) which is in violation of law or (iv) violated in any material respect any provision of FCPA.
(ff) Accountants.
To the knowledge and belief of the Company, the Company’s accounting firm (i) is a registered public accounting firm as required
by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s
Annual Report for the fiscal year ending December 31, 2024.
(gg) Reserved.
(hh) No
Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated
by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and the Company
is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability to perform any
of its obligations under any of the Transaction Documents.
(ii) Acknowledgment
Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the Purchasers is acting solely
in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby.
The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity)
with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or any of their
respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely
incidental to the Purchasers’ purchase of the Securities. The Company further represents to each Purchaser that the Company’s
decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the
transactions contemplated hereby by the Company and its representatives.
(jj) Acknowledgment
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding (except
for Sections 3.2(g) and 4.14 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers has been asked
by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the Company,
or “derivative” securities based on securities issued by the Company or to hold the Securities for any specified term, (ii)
past or future open market or other transactions by any Purchaser, specifically including, without limitation, Short Sales or “derivative”
transactions, before or after the closing of this or future private placement transactions, may negatively impact the market price of
the Company’s publicly-traded securities, (iii) any Purchaser, and counter-parties in “derivative” transactions to
which any such Purchaser is a party, directly or indirectly, may presently have a “short” position in the Common Stock and
(iv) each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative”
transaction. The Company further understands and acknowledges that (y) one or more Purchasers may engage in hedging activities at various
times during the period that the Securities are outstanding, including, without limitation, during the periods that the value of the
Underlying Shares deliverable with respect to Securities are being determined, and (z) such hedging activities (if any) could reduce
the value of the existing stockholders’ equity interests in the Company at and after the time that the hedging activities are being
conducted. The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction
Documents.
(kk) Regulation
M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly,
any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any
of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities
of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Placement Agent in connection with the placement
of the Securities.
(ll) Stock
Option Plans. Each stock option granted by the Company under the Company’s stock award plan was granted (i) in accordance with
the terms of the Company’s stock award plan and (ii) with an exercise price at least equal to the fair market value of the Common
Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted under the Company’s
stock award plan has been backdated. The Company has not knowingly granted, and there is no and has been no Company policy or practice
to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release or other public
announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.
(mm) IT
Systems; Data Privacy and Security. The information technology and computer systems, including the software, firmware, hardware,
equipment, networks, data communication lines, interfaces, databases, storage media, websites, platforms and related systems, owned,
licensed or leased by the Company and its Subsidiaries (collectively, “IT Systems”) are sufficient in all material
respects for the conduct of each of the business of the Company and its Subsidiaries, and to the knowledge of each of the Company and
its Subsidiaries, do not contain any “viruses”, “worms”, “time-bombs”, “key-locks”, or
any other devices intentionally designed to disrupt or interfere with the operation of any of the IT Systems; and during the last two
(2) years, there have been no material failures, breakdowns, continued substandard performance or other adverse events affecting any
of the IT Systems. Each of the Company and its Subsidiaries has and maintains commercially reasonable business continuity and disaster
recovery plans, procedures and facilities appropriate for its business and has taken commercially reasonable steps to safeguard the integrity
and security of IT Systems, including all data stored therein, and to the knowledge of each of the Company and its Subsidiaries, there
has been no unauthorized access, or any intrusions or breaches, of any of the IT Systems, including any data stored therein, during the
last two (2) years. Each of the Company and its Subsidiaries is, and during the last three (3) years has been, in compliance in all material
respects with all Data Privacy and Security Laws applicable to it. Each of the Company and its Subsidiaries has maintained and posted,
and complied with the terms of, all privacy notices pursuant to Data Privacy and Security Laws. Each of the Company and its Subsidiaries
has commercially reasonable security measures in place designed to protect all Personal Data under its control or in its possession from
unauthorized use, access, modification or destruction. During the last three (3) years, none of the Company nor its Subsidiaries has
suffered any breach in security or other incident that has permitted any unauthorized access to the Personal Data under its control or
possession. Each of the Company and its Subsidiaries maintains, and has remained in compliance, in all material respects, with, a comprehensive
written information security program that includes commercially reasonable administrative, physical and technical measures intended to
protect the confidentiality, integrity, availability and security of Personal Data in is possession or under its control and IT Systems
against any unauthorized control, use, access, interruption, modification or corruption and to ensure the continued, uninterrupted and
error-free operation of IT Systems. There are no material claims, actions or proceedings against or affecting any of the Company or its
Subsidiaries pending, threatened in writing, relating to or arising under Data Privacy and Security Laws. None of the Company nor its
Subsidiaries has received any written notices from the Department of Justice, U.S. Department of Education, Federal Trade Commission,
or the Attorney General of any state, or any equivalent foreign governmental authority, relating to possible violations of Data Privacy
and Security Laws. For purposes of this Agreement, (i) “Data Privacy and Security Laws” shall mean (a) all applicable
laws relating to the Processing of Personal Data or otherwise relating to privacy, data protection, data security, cyber security, breach
notification or data localization, and (b) all published policies of the Company and its Subsidiaries relating to the Processing of Personal
Data or otherwise relating to privacy, data protection, data security, cyber security, breach notification or data localization; (ii)
“Processing” shall mean the collection, use, storage, processing, recording, distribution, transfer, import, export,
protection, disposal or disclosure or other activity regarding or operations performed on data or information (whether electronically
or in any other form or medium); and (iii) “Personal Data” shall mean any information that, alone or in combination
with other information held by the Company and its Subsidiaries, identifies or could reasonably be associated with an individual, including
any individual’s name, street address, telephone number, e-mail address, photograph, social security number, driver’s license
number, passport number, customer or account number, biometrics, IP address, geolocation data or persistent device identifier, or any
other information that is otherwise considered personal information, personal data, protected health information by applicable Data Privacy
and Security Laws.
(nn) Office
of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director, officer, agent,
employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department (“OFAC”).
(oo) U.S.
Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning
of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s request.
(pp) Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of
1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent
(5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity of a bank
or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or
Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and
to regulation by the Federal Reserve.
(qq) Money
Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable
financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable
money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”),
and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company
or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.
(rr) No
Disqualification Events. With respect to the Securities to be offered and sold hereunder in reliance on Rule 506 under the Securities
Act, none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company
participating in the offering hereunder, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities,
calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with
the Company in any capacity at the time of sale (each, an “Issuer Covered Person” and, together, “Issuer
Covered Persons”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii)
under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2)
or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification
Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the
Purchasers a copy of any disclosures provided thereunder.
(ss) Other
Covered Persons. Other than the Placement Agent, the Company is not aware of any person (other than any Issuer Covered Person) that
has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any Securities.
(tt) Notice
of Disqualification Events. The Company will notify the Purchasers and the Placement Agent in writing, prior to the Closing Date
of (i) any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become
a Disqualification Event relating to any Issuer Covered Person.
3.2 Representations
and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as of the
date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they shall be accurate
as of such date):
(a) Organization;
Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company
or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise
to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by such
Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate, partnership,
limited liability company or similar action, as applicable, on the part of such Purchaser. Each Transaction Document to which it is a
party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute
the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except (i) as limited
by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies or (iii) insofar as indemnification and contribution provisions may be limited by applicable
law.
(b) Own
Account. Such Purchaser understands that the Securities are “restricted securities” and have not been registered under
the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account and not with
a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state
securities law, has no present intention of distributing any of such Securities in violation of the Securities Act or any applicable
state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the
distribution of such Securities in violation of the Securities Act or any applicable state securities law (this representation and warranty
not limiting such Purchaser’s right to sell the Securities pursuant to a registration statement, or otherwise in compliance with
applicable federal and state securities laws). Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business.
(c) Purchaser
Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each date on which
it exercises any Warrants it will be an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), (a)(8),
(a)(9), (a)(12) or (a)(13) under the Securities Act.
(d) Experience
of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience
in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities,
and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk of an investment in the
Securities and, at the present time, is able to afford a complete loss of such investment.
(e) General
Solicitation. Such Purchaser is not, to such Purchaser’s knowledge, purchasing the Securities as a result of any advertisement,
article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over
television or radio or presented at any seminar or, to the knowledge of such Purchaser, any other general solicitation or general advertisement.
(f) Access
to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits
and schedules thereto) and the SEC Reports and has been afforded (i) the opportunity to ask such questions as it has deemed necessary
of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities
and the merits and risks of investing in the Securities; (ii) access to information about the Company and its financial condition, results
of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity
to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary
to make an informed investment decision with respect to the investment. Such Purchaser acknowledges and agrees that neither the
Placement Agent nor any Affiliate of the Placement Agent has provided such Purchaser with any information or advice with respect to the
Securities nor is such information or advice necessary or desired. Neither the Placement Agent nor any Affiliate has made or makes
any representation as to the Company or the quality of the Securities and the Placement Agent and any Affiliate may have acquired non-public
information with respect to the Company which such Purchaser agrees need not be provided to it. In connection with the issuance
of the Securities to such Purchaser, neither the Placement Agent nor any of its Affiliates has acted as a financial advisor or fiduciary
to such Purchaser.
(g) Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has not, nor has
any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any purchases or
sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Purchaser first
received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms
of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding the foregoing, in the
case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s
assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other
portions of such Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of assets
managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement. Other than to
other Persons party to this Agreement or to such Purchaser’s representatives, including, without limitation, its officers, directors,
partners, legal and other advisors, employees, agents and Affiliates, such Purchaser has maintained the confidentiality of all disclosures
made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing,
for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty against, or a prohibition of, any
actions with respect to the borrowing of, arrangement to borrow, identification of the availability of, and/or securing of, securities
of the Company in order for such Purchaser (or its broker or other financial representative) to effect Short Sales or similar transactions
in the future.
The
Company acknowledges and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s
right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties
contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement
or the consummation of the transactions contemplated hereby. Notwithstanding the foregoing, for the avoidance of doubt, nothing contained
herein shall constitute a representation or warranty, or preclude any actions, with respect to locating or borrowing shares in order
to effect Short Sales or similar transactions in the future.
ARTICLE
IV.
OTHER
AGREEMENTS OF THE PARTIES
4.1 Transfer
Restrictions.
(a) The
Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities
other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Purchaser or in connection
with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion
of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the
Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and
shall have the rights and obligations of a Purchaser under this Agreement.
(b) The
Purchasers agree to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Securities in substantially
the following form:
[NEITHER]
THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS [EXERCISABLE] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY [AND THE SECURITIES ISSUABLE UPON [EXERCISE]
OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL
INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY
SUCH SECURITIES.
The
Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered
broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited investor”
as defined in Rule 501(a) under the Securities Act and, if required under the terms of such arrangement, such Purchaser may transfer
pledged or secured Securities to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company
and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no
notice shall be required of such pledge. At the appropriate Purchaser’s expense, the Company will execute and deliver such reasonable
documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the Securities,
including, if the Securities are subject to registration, the preparation and filing of any required prospectus supplement under Rule
424(b)(3) under the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of selling stockholders
thereunder.
(c) Certificates
evidencing the Underlying Shares shall not contain any legend (including the legend set forth in Section 4.1(b) hereof): (i) while a
registration statement (including the Resale Registration Statement) covering the resale of such security is effective under the Securities
Act, (ii) following any sale of such Underlying Shares pursuant to Rule 144 (assuming cashless exercise of the Warrants), (iii) if such
Underlying Shares are eligible for sale under Rule 144 (assuming cashless exercise of the Warrants), without the requirement for the
Company to be in compliance with the current public information required under Rule 144 as to such Underlying Shares and without volume
or manner-of-sale restrictions or (iv) if such legend is not required under applicable requirements of the Securities Act (including
judicial interpretations and pronouncements issued by the staff of the Commission). The Company shall cause its counsel to issue a legal
opinion to the Transfer Agent or the Purchaser promptly after the effective date of a resale Registration Statement, and in any event
within such time as to enable the Transfer Agent to remove the legend hereunder by the Legend Removal Date, if required by the Transfer
Agent to effect the removal of the legend hereunder, or if requested by a Purchaser, respectively. In the event that a Registration Statement
is not available for the resale of the Warrant Shares but the Warrant Shares may be sold pursuant to Rule 144, the Company shall cause
its counsel to issue a legal opinion to the Transfer Agent or the Purchaser promptly after requested by the Purchaser to permit a sale
of the Warrant Shares which opinion shall remain in effect until the date on which the Company’s next quarterly filing (10-K or
10-Q) is due. If all or any portion of a Warrant is exercised at a time when there is an effective registration statement to cover the
resale of the Underlying Shares, or if such Underlying Shares may be sold under Rule 144 without the requirement for the Company to be
in compliance with the current public information required under Rule 144 as to such Underlying Shares (assuming cashless exercise of
the Warrants) and without volume or manner-of-sale restrictions or if such legend is not otherwise required under applicable requirements
of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission) then such Underlying
Shares shall be issued free of all legends. The Company agrees that that following the receipt of Stockholder Approval and the Resale
Effective Date or at such time as such legend is no longer required under this Section 4.1(c), it will, no later than the earlier of
(i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following the delivery by a Purchaser
to the Company or the Transfer Agent of a certificate representing Underlying Shares, as applicable, issued with a restrictive legend
(such date, the “Legend Removal Date”), deliver or cause to be delivered to such Purchaser a certificate representing
such shares that is free from all restrictive and other legends. The Company may not make any notation on its records or give instructions
to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section 4. Certificates for Underlying Shares subject
to legend removal hereunder shall be transmitted by the Transfer Agent to the Purchaser by crediting the account of the Purchaser’s
prime broker with the Depository Trust Company System as directed by such Purchaser. As used herein, “Standard Settlement Period”
means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect
to the Common Stock as in effect on the date of delivery of a certificate representing Underlying Shares, as applicable, issued with
a restrictive legend.
(d) In
addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, (i) as partial liquidated
damages and not as a penalty, for each $1,000 of Underlying Shares (based on the VWAP of the Common Stock on the date such Securities
are submitted to the Transfer Agent) delivered for removal of the restrictive legend and subject to Section 4.1(c), $10 per Trading Day
(increasing to $20 per Trading Day five (5) Trading Days after such damages have begun to accrue) for each Trading Day after the Legend
Removal Date until such certificate is delivered without a legend to the extent permitted by Section 4.1(c) above and (ii) if the Company
fails to (a) issue and deliver (or cause to be delivered) to a Purchaser by the Legend Removal Date a certificate representing the Securities
so delivered to the Company by such Purchaser that is free from all restrictive and other legends and (b) if after the Legend Removal
Date such Purchaser purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale
by such Purchaser of all or any portion of the number of shares of Common Stock, or a sale of a number of shares of Common Stock equal
to all or any portion of the number of shares of Common Stock that such Purchaser anticipated receiving from the Company without any
restrictive legend, then, an amount equal to the excess of such Purchaser’s total purchase price (including brokerage commissions
and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including brokerage commissions and other out-of-pocket
expenses, if any) over the product of (A) such number of Underlying Shares that the Company was required to deliver to such Purchaser
by the Legend Removal Date multiplied by (B) the lowest closing sale price of the Common Stock on any Trading Day during the period commencing
on the date of the delivery by such Purchaser to the Company of the applicable Underlying Shares (as the case may be) and ending on the
date of such delivery and payment under this clause (ii).
(e) Each
Purchaser, severally and not jointly with the other Purchasers, agrees with the Company that such Purchaser will sell any Securities
pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or
an exemption therefrom, and that if Securities are sold pursuant to a registration statement, they will be sold in compliance with the
plan of distribution set forth therein, and acknowledges that the removal of the restrictive legend from certificates representing Securities
as set forth in this Section 4.1 is predicated upon the Company’s reliance upon this understanding.
4.2 Acknowledgment
of Dilution. The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding shares of Common
Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges that its obligations under
the Transaction Documents, including, without limitation, its obligation to issue the Underlying Shares pursuant to the Transaction Documents,
are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of
any such dilution or any claim the Company may have against any Purchaser and regardless of the dilutive effect that such issuance may
have on the ownership of the other stockholders of the Company.
4.3 Furnishing
of Information; Public Information.
(a) Until
the earlier of the time that (i) no Purchaser owns Securities or (ii) the Warrants have expired or are no longer outstanding, the Company
covenants to maintain the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange Act and to use reasonable best
efforts to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to
be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements
of the Exchange Act.
(b)
At any time during the period commencing from the six (6) month anniversary of the date hereof
and ending at such time that all of the Securities may be sold without the requirement for the Company to be in compliance with Rule
144(c)(1) and otherwise without restriction or limitation pursuant to Rule 144, if the Company (i) shall fail for any reason to satisfy
the current public information requirement under Rule 144(c) or (ii) becomes an issuer described in Rule 144 (i)(1)(i) in the future,
and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (a “Public Information Failure”) then,
in addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated
damages and not as a penalty, by reason of any such delay in or reduction of its ability to sell the Securities, an amount in cash equal
to two percent (2.0%) of the aggregate Subscription Amount of such Purchaser’s Securities on the 10th day following
a Public Information Failure which remains uncured as of such date and on every thirtieth (30th) day thereafter (pro rated
for periods totaling less than thirty days) thereafter until the earlier of (a) the date such Public Information Failure is cured and
(b) such time that such public information is no longer required for the Purchasers to transfer the Underlying Shares pursuant to Rule
144. The payments to which a Purchaser shall be entitled pursuant to this Section 4.3(b) are referred to herein as “Public
Information Failure Payments.” Public Information Failure Payments shall be paid on the earlier of (i) the last day of
the calendar month during which such Public Information Failure Payments are incurred and (ii) the third (3rd) Business Day
after the event or failure giving rise to the Public Information Failure Payments is cured. In the event the Company fails to make
Public Information Failure Payments in a timely manner, such Public Information Failure Payments shall bear interest at the rate of 1.5%
per month (prorated for partial months) until paid in full. Nothing herein shall limit such Purchaser’s right to pursue actual
damages for the Public Information Failure, and such Purchaser shall have the right to pursue all remedies available to it at law or
in equity including, without limitation, a decree of specific performance and/or injunctive relief.
4.4 Integration.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the
registration under the Securities Act of the sale of the Securities or that would be integrated with the offer or sale of the Securities
for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing
of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.
4.5 Exercise
Procedures. The form of Notice of Exercise included in the Warrants set forth the totality of the procedures required of the Purchasers
in order to exercise the Warrants. Without limiting the preceding sentences, no ink-original Notice of Exercise shall be required, nor
shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required in order to exercise
the Warrants. No additional legal opinion, other information or instructions shall be required of the Purchasers to exercise their Warrants.
The Company shall honor exercises of the Warrants and shall deliver Underlying Shares in accordance with the terms, conditions and time
periods set forth in the Transaction Documents.
4.6 Securities
Laws Disclosure; Publicity. The Company shall (a) by the Disclosure Time, issue a press release disclosing the material terms of
the transactions contemplated hereby, and (b) file a Current Report on Form 8-K, including the Transaction Documents as exhibits thereto,
with the Commission within the time required by the Exchange Act. From and after the issuance of such press release, the Company represents
to the Purchasers that it shall have publicly disclosed all material, non-public information delivered to any of the Purchasers by the
Company or any of its Subsidiaries, or any of their respective officers, directors, employees, Affiliates or agents, including, without
limitation, the Placement Agent, in connection with the transactions contemplated by the Transaction Documents. In addition, effective
upon the issuance of such press release, the Company acknowledges and agrees that any and all confidentiality or similar obligations
under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors,
agents, employees, Affiliates or agents, including, without limitation, the Placement Agent, on the one hand, and any of the Purchasers
or any of their Affiliates on the other hand, shall terminate and be of no further force or effect. The Company understands and confirms
that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company. The Company and
each Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby,
and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public statement without the
prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of each Purchaser, with
respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is
required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement
or communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name
of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such
Purchaser, except (a) as required by federal securities law or rule or form promulgated thereunder in connection with the filing of final
Transaction Documents with the Commission and (b) to the extent such disclosure is required by law or rule or form promulgated thereunder
or Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted
under this clause (b) and reasonably cooperate with such Purchaser regarding such disclosure.
4.7 Shareholder
Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any Purchaser
is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution
under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser
could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents
or under any other agreement between the Company and the Purchasers.
4.8 Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents,
which shall be disclosed pursuant to Section 4.6, the Company covenants and agrees that neither it nor any other Person acting on its
behalf will provide any Purchaser or its agents or counsel with any information that constitutes, or the Company reasonably believes
constitutes, material non-public information, unless prior thereto such Purchaser shall have consented in writing to the receipt of such
information and agreed in writing with the Company to keep such information confidential. The Company understands and confirms that each
Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent that the Company,
any of its Subsidiaries, or any of their respective officers, director, agents, employees or Affiliates delivers any material, non-public
information to a Purchaser without such Purchaser’s consent, the Company hereby covenants and agrees that such Purchaser shall
not have any duty of confidentiality to the Company, any of its Subsidiaries, or any of their respective officers, directors, employees,
Affiliates or agents, including, without limitation, the Placement Agent, or a duty to the Company, any of its Subsidiaries or any of
their respective officers, directors, employees, Affiliates or agents, including, without limitation, the Placement Agent, not to trade
on the basis of, such material, non-public information, provided that the Purchaser shall remain subject to applicable law. To the extent
that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding the
Company or any Subsidiaries, unless the Purchaser has consented in writing to the receipt of such material non-public information, the
Company shall simultaneously with the delivery of such notice file such notice with the Commission pursuant to a Current Report on Form
8-K. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in
securities of the Company.
4.9 Use
of Proceeds. The Company shall use the net proceeds from the sale of the Securities hereunder for working capital purposes and shall
not use such proceeds in violation of FCPA or OFAC regulations.
4.10 Indemnification
of Purchasers. Subject to the provisions of this Section 4.10, the Company will indemnify and hold each Purchaser and its directors,
officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person
holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members,
partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack
of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any and all
losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements,
court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result
of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement
or in the other Transaction Documents or (b) any action instituted against the Purchaser Parties in any capacity (including a Purchaser
Party’s status as an investor), or any of them or their respective Affiliates, by the Company or any stockholder of the Company
who is not an Affiliate of such Purchaser Party, arising out of or relating to any of the transactions contemplated by the Transaction
Documents. For the avoidance of doubt, the indemnification provided herein is intended to, and shall also cover, direct claims brought
by the Company against the Purchaser Parties; provided, however, that such indemnification shall not cover any loss, claim, damage or
liability to the extent it is finally judicially determined to be attributable to any Purchaser Party’s breach of any of the representations,
warranties, covenants or agreements made by such Purchaser Party in any Transaction Document or any conduct by a Purchaser Party which
is finally judicially determined to constitute fraud, gross negligence or willful misconduct. If any action shall be brought against
any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify
the Company in writing, and, except with respect to direct claims brought by the Company, the Company shall have the right to assume
the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the
right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized
by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel
or (iii) in such action there is, in the reasonable opinion of counsel to the applicable Purchaser Party (which may be internal counsel),
a material conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case
the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will not
be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Company’s
prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss,
claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants
or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents or any conduct by a Purchaser Party
which is finally judicially determined to constitute fraud, gross negligence or willful misconduct. In addition, if any Purchaser Party
takes actions to collect amounts due under any Transaction Documents or to enforce the provisions of any Transaction Documents, then
the Company shall pay the costs incurred by such Purchaser Party for such collection, enforcement or action, including, but not limited
to, attorneys' fees and disbursements. The indemnification and other payment obligations required by this Section 4.10 shall be made
by periodic payments of the amount thereof during the course of the investigation, defense, collection, enforcement or action, as and
when bills are received or are incurred; provided, that if any Purchaser Party is finally judicially determined not to be entitled to
indemnification or payment under this Section 4.10, such Purchaser Party shall promptly reimburse the Company for any payments that are
advanced under this sentence. The indemnity agreements contained herein shall be in addition to any cause of action or similar right
of any Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to law.
4.11 Reservation
and Listing of Securities.
(a) The
Company shall maintain a reserve of the Required Minimum from its duly authorized shares of Common Stock for issuance pursuant to the
Transaction Documents in such amount as may then be required to fulfill its obligations in full under the Transaction Documents.
(b) If,
on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the Required Minimum
on such date, then the Board of Directors shall use its reasonable efforts to amend the Company’s certificate or articles of incorporation
to increase the number of authorized but unissued shares of Common Stock to at least the Required Minimum at such time, as soon as possible
and in any event not later than the 60th day after such date.
(c) The
Company shall, if applicable: (i) in the time and manner required by the principal Trading Market, prepare and file with such Trading
Market an additional shares listing application covering a number of shares of Common Stock at least equal to the Required Minimum on
the date of such application, (ii) take all steps necessary to cause such shares of Common Stock to be approved for listing or quotation
on such Trading Market as soon as possible thereafter, (iii) provide to the Purchasers evidence of such listing or quotation and (iv)
maintain the listing or quotation of such Common Stock on any date at least equal to the Required Minimum on such date on such Trading
Market or another Trading Market. The Company agrees to maintain the eligibility of the Common Stock for electronic transfer through
the Depository Trust Company or another established clearing corporation, including, without limitation, by timely payment of fees to
the Depository Trust Company or such other established clearing corporation in connection with such electronic transfer.
4.12 Equal
Treatment of Purchasers. No consideration (including any modification of this Agreement but excluding the reimbursement of legal
fees) shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless
the same consideration is also offered to all of the parties to this Agreement. Further, the Company shall not make any payment of principal
or interest on the Notes in amounts which are disproportionate to the respective principal amounts outstanding on the Notes at any applicable
time. For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the Company and negotiated
separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not in any way be construed
as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise.
4.13 Certain
Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither it,
nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short
Sales, of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at such
time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described
in Section 4.6. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions
contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described in Section 4.6,
such Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information included in the Disclosure
Schedules (other than as disclosed to its legal and other representatives). Notwithstanding the foregoing, and notwithstanding anything
contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation,
warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that the
transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section
4.6, (ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance
with applicable securities laws from and after the time that the transactions contemplated by this Agreement are first publicly announced
pursuant to the initial press release as described in Section 4.6 and (iii) no Purchaser shall have any duty of confidentiality or duty
not to trade in the securities of the Company to the Company, any of its Subsidiaries, or any of their respective officers, directors,
employees, Affiliates or agent, including, without limitation, the Placement Agent, after the issuance of the initial press release as
described in Section 4.6. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle
whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct
knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant
set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision
to purchase the Securities covered by this Agreement.
4.14 Form
D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Securities as required under Regulation D and
to provide a copy thereof, promptly upon request of any Purchaser. The Company shall take such action as the Company shall reasonably
determine is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchasers at the Closing under
applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions promptly
upon request of any Purchaser.
4.15 Variable
Rate Transaction. From the date hereof until twelve (12) months from the Resale Effective Date, the Company and its Subsidiaries
shall be prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries of
shares of Common Stock or Common Stock Equivalents (or a combination of units thereof) involving a Variable Rate Transaction. Any Purchaser
shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy shall be in addition to
any right to collect damages.
ARTICLE
V.
MISCELLANEOUS
5.1 Termination.
This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect whatsoever
on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing has not been
consummated on or before the fifth (5th) Trading Day following the date hereof, provided, however, that no such
termination will affect the right of any party to sue for any breach by any other party (or parties).
5.2 Fees
and Expenses. The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees, or broker’s
commissions (other than for Persons engaged by any Purchaser) relating to or arising out of the transactions contemplated hereby, including,
without limitation, any fees or commissions payable to the Placement Agent. The Company shall pay, and hold each Purchaser harmless against,
any liability, loss or expense (including, without limitation, reasonable attorney’s fees and out-of-pocket expenses) arising in
connection with any claim relating to any such payment. Except as expressly set forth in the Transaction Documents to the contrary, each
party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred
by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay
all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered
by the Company and any exercise notice delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection with the
delivery of any Securities to the Purchasers.
5.3 Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.
5.4 Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication is delivered via facsimile
at the facsimile number or email attachment at the email address as set forth on the signature pages attached hereto at or prior to 5:30
p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the time of transmission, if such notice or communication
is delivered via facsimile at the facsimile number or email attachment as set forth on the signature pages attached hereto on a day that
is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading Day following
the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom
such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached
hereto.
5.5 Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in
the case of an amendment, by the Company and the Required Holders (or, prior to the Closing, the Company and each Purchaser) or, in the
case of a waiver, by the party against whom enforcement of any such waived provision is sought, provided that if any amendment, modification
or waiver disproportionately and adversely impacts a Purchaser (or group of Purchasers), the consent of such disproportionately impacted
Purchaser (or group of Purchasers) shall also be required. No waiver of any default with respect to any provision, condition or requirement
of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner
impair the exercise of any such right. Any amendment effected in accordance with this Section 5.5 shall be binding upon each Purchaser
and holder of Securities and the Company.
5.6 Headings.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any
of the provisions hereof.
5.7 Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser
(other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns
or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities,
by the provisions of the Transaction Documents that apply to the “Purchasers.”
5.8 No
Third Party Beneficiaries. The Placement Agent shall be the third-party beneficiary of the representations and warranties of the
Company in Section 3.1 and the representations and warranties of the Purchasers in Section 3.2. This Agreement is intended for the benefit
of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof
be enforced by, any other Person, except as otherwise set forth in Section 4.10 and this Section 5.8.
5.9 Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed
by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts
of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement and defense of the transactions
contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates,
directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts
sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts
sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents),
and hereby irrevocably waives, and agrees not to assert in any Action or Proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such Action or Proceeding is improper or is an inconvenient venue for such Proceeding. Each party
hereby irrevocably waives personal service of process and consents to process being served in any such Action or Proceeding by mailing
a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect
for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.
If any party shall commence an Action or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the
obligations of the Company under Section 4.10, the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing
party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution
of such Action or Proceeding.
5.10 Survival.
The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.
5.11 Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that
the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery
of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original
thereof.
5.12 Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force
and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts
to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
5.13 Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any
of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document
and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind
or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in
whole or in part without prejudice to its future actions and rights; provided, however, that, in the case of a rescission
of an exercise of a Warrant, the applicable Purchaser shall be required to return any shares of Common Stock subject to any such rescinded
exercise notice concurrently with the return to such Purchaser of the aggregate exercise price paid to the Company for such shares and
the restoration of such Purchaser’s right to acquire such shares pursuant to such Purchaser’s Warrant (including, issuance
of a replacement warrant certificate evidencing such restored right).
5.14 Replacement
of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall
issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of
and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company
of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable
third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.
5.15 Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers
and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may
not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and
hereby agree to waive and not to assert in any Action for specific performance of any such obligation the defense that a remedy at law
would be adequate.
5.16 Payment
Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or a
Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or
any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or
are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including,
without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such
restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such enforcement or setoff had not occurred.
5.17 Usury.
To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim, and will
resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any time hereafter
in force, in connection with any Action or Proceeding that may be brought by any Purchaser in order to enforce any right or remedy under
any Transaction Document. Notwithstanding any provision to the contrary contained in any Transaction Document, it is expressly agreed
and provided that the total liability of the Company under the Transaction Documents for payments in the nature of interest shall not
exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”), and, without limiting the foregoing,
in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums in the nature of interest
that the Company may be obligated to pay under the Transaction Documents exceed such Maximum Rate. It is agreed that if the maximum contract
rate of interest allowed by law and applicable to the Transaction Documents is increased or decreased by statute or any official governmental
action subsequent to the date hereof, the new maximum contract rate of interest allowed by law will be the Maximum Rate applicable to
the Transaction Documents from the effective date thereof forward, unless such application is precluded by applicable law. If under any
circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to any Purchaser with respect to indebtedness
evidenced by the Transaction Documents, such excess shall be applied by such Purchaser to the unpaid principal balance of any such indebtedness
or be refunded to the Company, the manner of handling such excess to be at such Purchaser’s election.
5.18 Independent
Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several
and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or non-performance
of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any other Transaction Document,
and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association,
a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Purchaser shall be entitled to independently
protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of the other Transaction
Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any Proceeding for such purpose.
Each Purchaser has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents. The
Company has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not
because it was required or requested to do so by any of the Purchasers. It is expressly understood and agreed that each provision contained
in this Agreement and in each other Transaction Document is between the Company and a Purchaser, solely, and not between the Company
and the Purchasers collectively and not between and among the Purchasers.
5.19
Liquidated Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction
Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts
have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts
are due and payable shall have been canceled.
5.20 Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted
herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
5.21 Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents
and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to
share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.
5.22 WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH
KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND
EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
(Signature
Pages Follow)
IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
Zoomcar Holdings, Inc. |
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[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGE FOR PURCHASER FOLLOWS]
[PURCHASER
SIGNATURE PAGES TO Zoomcar Holdings Inc. SECURITIES PURCHASE AGREEMENT]
IN
WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories
as of the date first indicated above.
Name
of Purchaser: ________________________________________________________
Signature
of Authorized Signatory of Purchaser: __________________________________
Name
of Authorized Signatory: ____________________________________________________
Title
of Authorized Signatory: _____________________________________________________
Email
Address of Authorized Signatory: _____________________________________________
Address
for Notice to Purchaser:
Address
for Delivery of Securities to Purchaser (if not same as address for notice):
Subscription
Amount: $_____________
Principal
Amount of Notes: $_____________
Beneficial
Ownership Blocker for Notes ☐ 4.99% or ☐ 9.99%
Warrant
Shares: _______________ Beneficial Ownership Blocker for Warrants ☐ 4.99% or ☐ 9.99%
EIN
Number: _______________________
[SIGNATURE
PAGES CONTINUE]
Exhibit 10.2
[FORM OF NOTE]
THIS SECURITY HAS NOT BEEN REGISTERED WITH
THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT
IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES. ANY
TRANSFEREE OF THIS NOTE SHOULD CAREFULLY REVIEW THE TERMS OF THIS NOTE, INCLUDING SECTIONS 3(c)(iii) AND 18(a) HEREOF. THE PRINCIPAL AMOUNT
REPRESENTED BY THIS NOTE MAY BE LESS THAN THE AMOUNT SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 3(c)(iii) OF THIS NOTE.
THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE
DISCOUNT (“OID”). PURSUANT TO TREASURY REGULATION §1.1275-3(b)(1), GREGORY MORAN, A REPRESENTATIVE OF THE COMPANY HEREOF
WILL, BEGINNING TEN DAYS AFTER THE ISSUANCE DATE OF THIS NOTE, PROMPTLY MAKE AVAILABLE TO THE HOLDER UPON REQUEST THE INFORMATION DESCRIBED
IN TREASURY REGULATION §1.1275-3(b)(1)(i). GREGORY MORAN MAY BE REACHED AT TELEPHONE NUMBER [●].
Zoomcar
Holdings, Inc.
PROMISSORY
NOTE
Issuance Date: June [●], 2024 |
Original Principal Amount: U.S. $[●]1 |
FOR VALUE RECEIVED, Zoomcar
Holdings, Inc., a Delaware corporation (the “Company”), hereby promises to pay to [●] or registered assigns (the
“Holder”) in cash the amount set forth above as the Original Principal Amount (as reduced pursuant to the terms hereof
pursuant to redemption or otherwise, the “Principal”) when due, whether upon the Maturity Date (as defined below), acceleration,
redemption or otherwise (in each case in accordance with the terms hereof) and to pay interest (“Interest”), if applicable,
on any outstanding Principal at the applicable Default Rate at any time during the occurrence and continuance of an Event of Default occurring
from the date set out above as the Issuance Date (the “Issuance Date”) until the same becomes due and payable, whether
upon the Maturity Date, acceleration, redemption or otherwise (in each case in accordance with the terms hereof). This Note (including
all Notes issued in exchange, transfer or replacement hereof, this “Note”) is one of an issue of Notes issued pursuant
to the Securities Purchase Agreement on the Closing Date (collectively, the “Notes” and such other Notes, the “Other
Notes”). Certain capitalized terms used herein are defined in Section 31.
1 | Subscription amount multiplied by 1.2 |
(1) ORIGINAL
ISSUE DISCOUNT; PAYMENTS OF PRINCIPAL; PREPAYMENT. The Company acknowledges and agrees that this Note was issued at an original issue
discount. On the Maturity Date, if any portion of this Note remains outstanding, the Company shall pay to the Holder an amount in cash
representing all outstanding Principal, any accrued and unpaid Interest. The “Maturity Date” shall be the earlier of
(a) 9 months from the Issuance Date or (b) the closing of one or more subsequent equity, debt or other capital raise(s) or any sale of
tangible or intangible assets with net proceeds sufficient to repay all amounts due under the Note. In the event of a Maturity Date under
clause (b), all amounts due under the Note will be repaid from the closing flow of funds for such subsequent capital raise(s). The Maturity
Date may be extended at the option of the Holder (x) in the event that, and for so long as, an Event of Default (as defined in Section
4(a)) shall have occurred and be continuing on the Maturity Date (as may be extended pursuant to this Section 1) or any event shall have
occurred and be continuing on the Maturity Date (as may be extended pursuant to this Section 1) that with the passage of time and the
failure to cure would result in an Event of Default and/or (y) through the date that is ten (10) Business Days after the consummation
of a Change of Control in the event that a Change of Control is publicly announced or a Change of Control Notice (as defined in Section
5(b)) is delivered prior to the Maturity Date. Other than as specifically permitted by this Note, the Company may not prepay any portion
of the outstanding Principal or accrued and unpaid Interest, if any.
(2) INTEREST.
Interest shall accrue on this Note shall commence accruing on the Issuance Date at fifteen percent (15.0%) per annum and shall be computed
on the basis of a 360-day year and twelve 30-day months and shall be payable in arrears on the Maturity Date to the record holder of this
Note in cash by wire transfer of immediately available funds pursuant to wire instructions provided by the Holder in writing to the Company.
From and after the occurrence and during the continuance of any Event of Default, Interest shall accrue hereunder at twenty percent (20.0%)
per annum (the “Default Rate”). Accrued and unpaid Interest, if any, may also be payable, at the election of the Holder,
by way of inclusion of the Interest in the Note Amount (as defined below) upon any redemption hereunder occurring prior to the Maturity
Date, including, without limitation, upon a Bankruptcy Event of Default redemption. In the event that an Event of Default is subsequently
cured (and no other Event of Default then exists (including, without limitation, for the Company’s failure to pay such Interest at the
Default Rate on the Maturity Date)), Interest at the Default Rate shall cease to accrue hereunder as of the calendar day immediately following
the date of such cure; provided that the Interest as calculated and unpaid during the continuance of such Event of Default shall
continue to apply. provided, further, that for the purpose of this Section 2, such Event of Default shall not be deemed
cured unless and until any accrued and unpaid Interest shall be paid to the Holder. As used herein, “Note Amount” means
the sum of (x) the portion of the Principal to be redeemed or otherwise with respect to which this determination is being made, and (y)
accrued and unpaid Interest, if any, with respect to such Principal.
(3) Note
Registration; Book Entry. The Company shall maintain a register (the “Register”) for the recordation of the names
and addresses of the holders of each Note and the Principal amount of the Notes (and stated interest thereon) held by such holders (the
“Registered Notes”). The entries in the Register shall be conclusive and binding for all purposes absent manifest error.
The Company and the holders of the Notes shall treat each Person whose name is recorded in the Register as the owner of a Note for all
purposes, including, without limitation, the right to receive payments of Principal and Interest, if any, hereunder, notwithstanding notice
to the contrary. A Registered Note may be assigned or sold in whole or in part only by registration of such assignment or sale on the
Register. Upon its receipt of a request to assign or sell all or part of any Registered Note by the Holder, the Company shall record the
information contained therein in the Register and issue one or more new Registered Notes in the same aggregate Principal amount as the
Principal amount of the surrendered Registered Note to the designated assignee or transferee pursuant to Section 18. Notwithstanding anything
to the contrary in this Section 3(c)(iii), the Holder may assign any Note or any portion thereof to an Affiliate of the Holder or a Related
Fund of the Holder without delivering a request to assign or sell the Note to the Company and the recordation of such assignment or sale
in the Register (a “Related Party Assignment”); provided, that (x) the Company may continue to deal solely with such
assigning or selling Holder unless and until the Holder has delivered a request to assign or sell the Note or portion thereof to the Company
for recordation in the Register; (y) the failure of such assigning or selling Holder to deliver a request to assign or sell the Note or
portion thereof to the Company shall not affect the legality, validity, or binding effect of such assignment or sale and (z) such assigning
or selling Holder shall, acting solely for this purpose as a non-fiduciary agent of the Company, maintain a register (the “Related
Party Register”) comparable to the Register on behalf of the Company, and any such assignment or sale shall be effective upon
recordation of such assignment or sale in the Related Party Register.
(4) RIGHTS
UPON EVENT OF DEFAULT.
(a) Event
of Default. Each of the following events or failure to comply therewith shall constitute an “Event of Default” and
each of the events described in clauses (iii) and (iv) shall also constitute a “Bankruptcy Event of Default”:
(i) the
Company’s failure to pay to the Holder any amount of Principal, Interest, Redemption Price or other material amounts when and as due under
this Note or any other Transaction Document;
(ii) any
default under, redemption of, or acceleration prior to maturity of any Indebtedness of the Company or any of its Subsidiaries other than
with respect to this Note or any Other Notes occurring after this Issuance Date (it being understood and agreed that the default of any
Indebtedness of the Company that was in default prior to the Issuance Date shall not constitute an Event of Default hereunder);
(iii) the
Company or any of its Subsidiaries, pursuant to or within the meaning of Title 11, U.S. Code, or any similar federal, foreign or state
law for the relief of debtors (collectively, “Bankruptcy Law”), (A) commences a bankruptcy voluntary case, (B) consents
to the entry of an order for relief against it in an involuntary bankruptcy case, (C) consents to the appointment of a receiver, trustee,
assignee, liquidator or similar official (a “Custodian”), (D) makes a general assignment for the benefit of its creditors
or (E) admits in writing that it is generally unable to pay its debts as they become due;
(iv) a
court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (A) is for relief against the Company or any of
its Subsidiaries in an involuntary case, (B) appoints a Custodian of the Company or any of its Subsidiaries or (C) orders the liquidation
of the Company or any of its Subsidiaries;
(v) a
final judgment or judgments for the payment of money aggregating in excess of $250,000 are rendered against the Company or any of its
Subsidiaries and which judgments are not, within sixty (60) days after the entry thereof, bonded, discharged or stayed pending appeal,
or are not discharged within sixty (60) days after the expiration of such stay; provided, however, that any judgment which
is covered by insurance or an indemnity from a credit worthy party shall not be included in calculating the $250,000 amount set forth
above so long as the Company provides the Holder a written statement from such insurer or indemnity provider (which written statement
shall be reasonably satisfactory to the Holder) to the effect that such judgment is covered by insurance or an indemnity and the Company
or such Subsidiary (as the case may be) will receive the proceeds of such insurance or indemnity within thirty (30) days of the issuance
of such judgment;
(vi) other
than as specifically set forth in another clause of this Section 4(a), the Company or any of its Subsidiaries materially breaches any
representation, warranty, covenant or other term or condition of any Transaction Document, except, in the case of a breach of a covenant
or other term or condition of any Transaction Document which is curable, only if such breach continues for a period of at least an aggregate
of five (5) Business Days;
(vii) any
breach or failure in any respect to comply with either Sections 14 or 15 of this Note;
(viii) any
material damage to, or loss, theft or destruction of a material amount of property of the Company, whether or not insured, or any strike,
lockout, labor dispute, embargo, condemnation, act of God or public enemy, or other casualty which causes, for more than fifteen (15)
consecutive days, the cessation or substantial curtailment of revenue producing activities at any facility of the Company or any Subsidiary,
if any such event or circumstance would reasonably be expected to have a Material Adverse Effect;
(ix) any
Material Adverse Effect occurs; or
(x) any
Event of Default (as defined in the Other Notes) occurs with respect to any Other Notes.
(b) Redemption
Right. At any time after the earlier of the Holder’s receipt of an Event of Default Notice (as defined in Section 15(f)) and the Holder
becoming aware of an Event of Default, the Holder may require the Company to redeem (an “Event of Default Redemption”)
all or any portion of this Note by delivering written notice thereof (the “Event of Default Redemption Notice”) to the
Company, which Event of Default Redemption Notice shall indicate the portion of this Note the Holder is electing to require the Company
to redeem. Each portion of this Note subject to redemption by the Company pursuant to this Section 4(b) shall be redeemed by the Company
in cash by wire transfer of immediately available funds at a price equal to the product of (A) the Redemption Premium and (B) the Note
Amount being redeemed (the “Event of Default Redemption Price”). Redemptions required by this Section 4(b) shall be made
in accordance with the provisions of Section 11. To the extent redemptions required by this Section 4(b) are deemed or determined by a
court of competent jurisdiction to be prepayments of the Note by the Company, such redemptions shall be deemed to be voluntary prepayments.
The parties hereto agree that in the event of the Company’s redemption of any portion of the Note under this Section 4(b), the Holder’s
damages would be uncertain and difficult to estimate because of the parties’ inability to predict future interest rates and the uncertainty
of the availability of a suitable substitute investment opportunity for the Holder. Accordingly, any Redemption Premium with respect to
an Event of Default due under this Section 4(b) is intended by the parties to be, and shall be deemed, a reasonable estimate of the Holder’s
actual loss of its investment opportunity and not as a penalty.
(c) Redemption
upon Bankruptcy Event of Default. Notwithstanding anything to the contrary herein upon any Bankruptcy Event of Default, whether occurring
prior to or following the Maturity Date, the Company shall immediately pay to the Holder an amount in cash representing 100% of all outstanding
Principal, accrued and unpaid Interest, if any, in addition to any and all other amounts due hereunder (the “Bankruptcy Event
of Default Redemption Price”), without the requirement for any notice or demand or other action by the Holder or any other Person;
provided that the Holder may, in its sole discretion, waive such right to receive payment upon a Bankruptcy Event of Default, in whole
or in part, and any such waiver shall not affect any other rights of the Holder hereunder, including any other rights in respect of such
Bankruptcy Event of Default, and any right to payment of the Event of Default Redemption Price or any other Redemption Price, as applicable.
Redemptions required by this Section 4(c) shall be made in accordance with the provisions of Section 11.
(5) RIGHTS
UPON FUNDAMENTAL TRANSACTION AND CHANGE OF CONTROL.
(a) Assumption.
The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor
Entity”) to assume in writing all of the obligations of the Company under this Note and the other Transaction Documents in accordance
with the provisions of this Section 5(a) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and
approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver
to the Holder in exchange for this Note a security of the Successor Entity evidenced by a written instrument substantially similar in
form and substance to this Note. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall be added to the term
“Company” under this Note (so that from and after the occurrence or consummation of such
Fundamental Transaction, each and every provision of this Note and the other Transaction Documents referring to the “Company”
shall refer instead to each of the Company and the Successor Entity or Successor Entities, jointly and severally), and the Successor Entity
or Successor Entities, jointly and severally with the Company, may exercise every right and power of the Company prior thereto and the
Successor Entity or Successor Entities shall assume all of the obligations of the Company prior thereto under this Note and the other
Transaction Documents with the same effect as if the Company and such Successor Entity or Successor Entities, jointly and severally, had
been named as the Company in this Note.
(b) Redemption
Right. No later than ten (10) days prior to the consummation of a Change of Control, the Company shall deliver written notice thereof
via electronic mail and overnight courier to the Holder (a “Change of Control Notice”) setting
forth a description of such transaction in reasonable detail and the anticipated Change of Control Redemption Date (as defined in Section
11(a)) if then known. At any time during the period beginning on the earlier to occur of (x) any oral or written agreement by the
Company or any of its Subsidiaries, upon consummation of which the transaction contemplated thereby would reasonably be expected to result
in a Change of Control, (y) the Holder becoming aware of a Change of Control and (z) the Holder’s receipt of a Change of Control Notice
and ending twenty-five (25) days after the date of the consummation of such Change of Control, the Holder may require the Company to redeem
(a “Change of Control Redemption”) all or any portion of this Note by delivering written notice thereof (“Change
of Control Redemption Notice”) to the Company, which Change of Control Redemption Notice shall indicate the Note Amount the Holder
is electing to require the Company to redeem. The portion of this Note subject to redemption pursuant to this Section 5(b) shall be redeemed
by the Company in cash by wire transfer of immediately available funds at a price equal to the Note Amount being redeemed (the “Change
of Control Redemption Price”). Redemptions required by this Section 5 shall be made in accordance with the provisions of Section
11 and shall have priority to payments to stockholders in connection with a Change of Control. To the extent redemptions required by this
Section 5(b) are deemed or determined by a court of competent jurisdiction to be prepayments of the Note by the Company, such redemptions
shall be deemed to be voluntary prepayments. The parties hereto agree that in the event of the Company’s redemption of any portion of
the Note under this Section 5(b), the Holder’s damages would be uncertain and difficult to estimate because of the parties’ inability
to predict future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for the Holder.
(6) Bankruptcy
Waiver. The Company agrees that if it (i) files with any bankruptcy court of competent jurisdiction or is the subject of any petition
under Title 11 of the U.S. Code, as amended, (ii) is the subject of any order for relief issued under Title 11 of the U.S. Code, as amended,
(iii) files or is the subject of any petition seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any present or law relating to bankruptcy, insolvency or other relief of debtors, (iv) has sought or consents
to or acquiesces in the appointment of any trustee, receiver, conservator or liquidator or (v) is the subject of any order, judgment or
decree entered by any court of competent jurisdiction approving a petition filed against such party for any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any present or future federal or state act or law relating
to bankruptcy, insolvency or other relief for debtors, the automatic stay provided by the Federal Bankruptcy Code shall be modified and
annulled as to Holder, so as to permit Holder to exercise any and all of its rights and remedies, upon request of Holder made on notice
to the Company and any other party in interest but without the need of further proof or hearing. Neither the Company nor any Affiliate
of the Company shall contest the enforceability of this Section.
(7) Mandatory
Redemption.
(a) Occurrence
of Mandatory Redemption. While this Note is outstanding, the Company shall use the net proceeds of any offering of its securities,
including any underwritten or other public offering of securities (any such offering, a “Subsequent Offering” and the
net proceeds from such Subsequent Offering, the “Net Proceeds”) to redeem this Note in full, including the Note Amount
and all other amounts due and payable pursuant to this Note, and all other then outstanding Notes (a “Mandatory Redemption”);
provided, however, that if the Net Proceeds of the Subsequent Offering are less than the amount required to repay all of the Notes in
full, (i) the Company’s repayment obligation under this Section 6(a) shall be limited to the amount of such Net Proceeds, (ii) the
Net Proceeds shall be applied to all of the Notes then outstanding pro rata based on the principal amount of such Notes then outstanding
and (iii) the Company shall effect successive Mandatory Redemptions upon each Subsequent Offering until the Notes are repaid in full or
otherwise no longer outstanding.
(b) Mandatory
Notices. With respect to each Mandatory Redemption, the Company shall deliver a written notice to all, but not less than all, of the
holders of Notes (the “Mandatory Redemption Notice” and the date such notice is delivered to all such holders is referred
to as a “Mandatory Redemption Notice Date”) (a) stating the date on which the Mandatory Redemption shall occur (a “Mandatory
Redemption Date”), which date shall be the date of the consummation of the applicable Subsequent Offering, (b) stating the expected
amount of Net Proceeds with respect to the applicable Subsequent Offering and (c) contain a certification from the Chief Executive Officer
or Chief Financial Officer of the Company that the Company has simultaneously taken the same action with respect to all of the Notes.
Each Mandatory Redemption Notice shall be delivered no later than the first (1st) Business Day following the announcement of the pricing
of the applicable Subsequent Offering, and the Company shall make a public announcement containing the information set forth in the applicable
Mandatory Redemption Notice on or before the related Mandatory Redemption Notice Date to the extent that the notice contains any, or constitutes,
material, non-public information.
(c)
Mandatory Redemption Procedure. The payment of cash pursuant to the Mandatory Redemption shall be payable in full on the Business
Day immediately following the Mandatory Redemption Date by wire transfer of immediately available funds in accordance with the Holder’s
wire instructions. If any portion of the payment pursuant to a Mandatory Redemption shall not be paid by the Company by the applicable
due date, interest shall accrue thereon at an interest rate equal to the lesser of eighteen percent (18%) per annum or the maximum rate
permitted by applicable law until such amount is paid in full. Notwithstanding anything to the contrary in this Section 6(c), the Net
Proceeds shall be applied ratably among the Holders of the Notes.
(8) OPTIONAL
PREPAYMENT. The Company may prepay (each, an “Optional Prepayment”) the Note in whole or in part at any time or from
time to time by paying the Holder in cash by wire transaction of immediately available funds 100% of the Note Amount being prepaid provided,
however, that in the event of any such redemption, the Company shall also pay to the Investors an amount sufficient to ensure that the
Investors receive the full amount of Interest that would have accrued on the Principal amount being prepaid through the date that is nine
(9) months after the Issuance Date. The Company may exercise its right to require prepayment under this Section 8 by delivering a written
notice thereof by electronic mail and overnight courier to the Holder and all, but not less than all, of the holders of the Other Notes
(an “Optional Prepayment Notice” and the date all of the holders of the Notes received such notice is referred to as
the “Optional Prepayment Notice Date”). Each Optional Prepayment Notice shall be irrevocable. Each Optional Prepayment
Notice shall (i) state the date on which the Optional Prepayment shall occur (the “Optional Prepayment Date”), which
date shall not be less than two (2) Business Days following the applicable Optional Prepayment Notice Date, and (ii) state the aggregate
Note Amount of the Notes which the Company has elected to be subject to Optional Prepayment from the Holder and all of the other holders
of the Other Notes pursuant to this Section 8 (and analogous provisions under the Other Notes) on the related Optional Prepayment Date.
If the Company elects to cause an Optional Prepayment pursuant to this Section 8, then it must simultaneously take the same action in
the same proportion with respect to the Other Notes.
(9) NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation or Bylaws or through
any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any
other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Note, and will at all times in
good faith carry out all of the provisions of this Note and take all action as may be required to protect the rights of the Holder of
this Note.
(10) [Intentionally
Omitted]
(11) REDEMPTIONS.
(a) Mechanics.
The Company shall deliver the applicable Event of Default Redemption Price to the Holder within three (3) Business Days after the Company’s
receipt of the Holder’s Event of Default Redemption Notice; provided that upon a Bankruptcy Event of Default, the Company shall deliver
the applicable Bankruptcy Event of Default Redemption Price in accordance with Section 4(c) (as applicable, the “Event of Default
Redemption Date”). If the Holder has submitted a Change of Control Redemption Notice in accordance with Section 5(b), the Company
shall deliver the applicable Change of Control Redemption Price to the Holder (i) concurrently with the consummation of such Change of
Control if such notice is received prior to the consummation of such Change of Control and (ii) within three (3) Business Days after the
Company’s receipt of such notice otherwise (such date, the “Change of Control Redemption Date”). The Company shall deliver
the applicable Note Amount being prepaid to the Holder on the applicable Optional Prepayment Date. The Company shall pay the applicable
Redemption Price to the Holder in cash by wire transfer of immediately available funds pursuant to wire instructions provided by the Holder
in writing to the Company on the applicable due date. In the event of a redemption of less than all of the Note Amount of this Note, the
Company shall promptly cause to be issued and delivered to the Holder a new Note (in accordance with Section 18(d)) representing the outstanding
Principal which has not been redeemed and any accrued Interest on such Principal which shall be calculated as if no Redemption Notice
has been delivered. In the event that the Company does not pay a Redemption Price to the Holder within the time period required, at any
time thereafter and until the Company pays such unpaid Redemption Price in full, the Holder shall have the option, in lieu of redemption,
to require the Company to promptly return to the Holder all or any portion of this Note representing the Note Amount that was submitted
for redemption and for which the applicable Redemption Price has not been paid. Upon the Company’s receipt of such notice, (x) the applicable
Redemption Notice shall be null and void with respect to such Note Amount, and (y) the Company shall immediately return this Note, or
issue a new Note (in accordance with Section 18(d)) to the Holder representing such Note Amount to be redeemed.
(b) Redemption
by Other Holders. Upon the Company’s receipt of notice from any of the holders of the Other Notes for redemption or repayment as a
result of an event or occurrence substantially similar to the events or occurrences described in Section 4(b), Section 5(b) or Section
8 or pursuant to corresponding provisions set forth in the Other Notes (each, an “Other Redemption Notice”), the Company
shall immediately, but no later than one (1) Business Day of its receipt thereof, forward to the Holder by electronic mail a copy of such
notice. If the Company receives a Redemption Notice and one or more Other Redemption Notices, during the seven (7) Business Day period
beginning on and including the date which is three (3) Business Days prior to the Company’s receipt of the Holder’s Redemption Notice
and ending on and including the date which is three (3) Business Days after the Company’s receipt of the Holder’s Redemption Notice and
the Company is unable to redeem all principal, interest and other amounts designated in such Redemption Notice and such Other Redemption
Notices received during such seven (7) Business Day period, then the Company shall redeem, a pro rata amount from the Holder and each
holder of the Other Notes based on the Principal amount of this Note and the Other Notes submitted for redemption pursuant to such Redemption
Notice and such Other Redemption Notices received by the Company during such seven (7) Business Day period.
(c) Insufficient
Assets. If upon a Redemption Date, the assets of the Company are insufficient to pay the applicable Redemption Price, the Company
shall (i) take all appropriate action reasonably within its means to maximize the assets available for paying the applicable Redemption
Price, (ii) redeem out of all such assets available therefor on the applicable Redemption Date the maximum possible portion of the applicable
Redemption Price that it can redeem on such date, pro rata among the Holder and the holders of the Other Notes to be redeemed in proportion
to the aggregate Principal amount of this Note and the Other Notes outstanding on the applicable Redemption Date and (iii) following the
applicable Redemption Date, at any time and from time to time when additional assets of the Company become available to pay the balance
of the applicable Redemption Price of this Note and the Other Notes, the Company shall use such assets, at the end of the then current
fiscal quarter, to pay the balance of such Redemption Price of this Note and the Other Notes, or such portion thereof for which assets
are then available, on the basis set forth above at the applicable Redemption Price, and such assets will not be used prior to the end
of such fiscal quarter for any other purpose. Interest on the Principal amount of this Note and the Other Notes that have not been redeemed
shall continue to accrue until such time as the Company redeems this Note and the Other Notes. The Company shall pay to the Holder the
applicable Redemption Price without regard to the legal availability of funds unless expressly prohibited by applicable law or unless
the payment of the applicable Redemption Price could reasonably be expected to result in personal liability to the directors of the Company.
(12) VOTING
RIGHTS. The Holder shall have no voting rights as the holder of this Note, except as required by law and as expressly provided in
this Note.
(13) [Intentionally
Omitted].
(14) NEGATIVE
COVENANTS. Except as noted below, until all of the Notes have been redeemed or otherwise satisfied in full in accordance with their
terms, the Company shall not, and the Company shall not permit any of its Subsidiaries without the prior written consent of the Required
Holders to, directly or indirectly by merger or otherwise:
(a) while
any Notes remain outstanding, incur or guarantee, assume or suffer to exist any Indebtedness, other than Permitted Indebtedness;
(b) allow
or suffer to exist any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets (including
accounts and contract rights) owned by the Company or any of its Subsidiaries (collectively, “Liens”) other than Permitted
Liens;
(c) redeem,
defease, repurchase, repay or make any payments in respect of, by the payment of cash or cash equivalents (in whole or in part, whether
by way of open market purchases, tender offers, private transactions or otherwise), all or any portion of any Indebtedness (other than
this Note and the Other Notes), whether by way of payment in respect of principal of (or premium, if any) or interest on, such Indebtedness
if at the time such payment is due or is otherwise made or, after giving effect to such payment, an event constituting, or that with the
passage of time and without being cured would constitute, an Event of Default has occurred and is continuing;
(d) redeem,
defease, repurchase, repay or make any payments in respect of, by the payment of cash or cash equivalents (in whole or in part, whether
by way of open market purchases, tender offers, private transactions or otherwise), all or any portion of any Indebtedness (including,
without limitation Permitted Indebtedness other than this Note and the Other Notes), by way of payment in respect of principal of (or
premium, if any) such Indebtedness. For clarity, such restriction shall not preclude the payment of regularly scheduled interest payments
which may accrue under such Permitted Indebtedness;
(e) redeem
or repurchase any Equity Interest of the Company;
(f) declare
or pay any cash dividend or distribution on any Equity Interest of the Company or of its Subsidiaries other than wholly-owned Subsidiaries;
(g) make,
any change in the nature of its business as described in the Company’s most recent Quarterly Report filed on Form 10-Q with the SEC or
modify its corporate structure or purpose; or
(h) encumber,
license or otherwise allow any Liens on any Intellectual Property Rights, including, without limitation, any claims for damage by way
of any past, present, or future infringement of any of the foregoing, in each case, other than Permitted Liens;
(i) enter
into, renew, extend or be a party to, any transaction or series of related transactions (including, without limitation, the purchase,
sale, lease, license, transfer or exchange of property or assets of any kind or the rendering of services of any kind) with any Affiliate,
except in the ordinary course of business in a manner and to an extent consistent with past practice and necessary or desirable for the
prudent operation of its business, for fair consideration and on terms no less favorable to it or its Subsidiaries than would be obtainable
in a comparable arm’s length transaction with a Person that is not an Affiliate thereof; or
(j) issue
any Notes or issue any other securities that would cause a breach or default under the Notes.
(15) AFFIRMATIVE
COVENANTS. Until all of the Notes have been redeemed or otherwise satisfied in full in accordance with their terms, the Company shall,
and the Company shall cause each Subsidiary to, unless otherwise agreed to by the Required Holders, directly
and indirectly:
(a) maintain
and preserve its existence, rights and privileges, and become or remain duly qualified and in good standing in each jurisdiction in which
the character of the properties owned or leased by it or in which the transaction of its business
makes such qualification necessary;
(b) maintain
and preserve all of its properties which are necessary or useful in the proper conduct of its business in good working order and condition,
ordinary wear and tear excepted, and comply at all times with the provisions of all leases to which it is a party as lessee or under which
it occupies property, so as to prevent any loss or forfeiture thereof or thereunder;
(c) take
all action necessary or advisable to maintain all of the Intellectual Property Rights that is necessary or material to the conduct of
its business in full force and effect;
(d) maintain
current insurance policies, in such amounts and covering such risks as such policies currently cover; and
(e) promptly,
but in any event within one (1) Business Day, notify the Holder and the holders of the Other Notes in writing whenever an Event of Default
(an “Event of Default Notice”) occurs, and simultaneously with the delivery of such notice to the Holder and the holders
of the Other Notes, file a Current Report on Form 8-K with the SEC to state such fact; and
(f) until
ninety (90) days after repayment of the Notes, provide the Holder and the holders of the Other Notes with ninety (90) days prior written
notice of any decision by the Company to commence a voluntary bankruptcy case under the Bankruptcy laws as well as providing drafts
of any documents, including schedules and exhibits to be filed in connection with any such voluntary bankruptcy case. Any such determination
to commence a voluntary bankruptcy case may be made only upon the unanimous recommendation of the Audit Committee and unanimous approval
of the full Board of Directors of the Company after advice of competent legal counsel.
(16) VOTE
TO ISSUE, OR CHANGE THE TERMS OF, NOTES. The affirmative vote at a meeting duly called for such purpose or the written consent without
a meeting of the Required Holders shall be required for any exchange, change or amendment or waiver of any provision to this Note or any
of the Other Notes. Any exchange, change, amendment or waiver by the Company and the Required Holders shall be binding on the Holder of
this Note and all holders of the Other Notes. The Holder hereby acknowledges and agrees that any action taken pursuant to this Section
may result in, or be perceived to result in, a disproportionate impact on the Holder compared to the impact of such action on one or more
holder(s) of Other Notes. This provision constitutes a separate right granted to each of the holders of Notes by the Company and shall
not in any way be construed as such holders acting in concert or as a group with respect to the purchase, disposition or voting of securities
or otherwise.
(17) TRANSFER.
This Note may be offered, sold, assigned or transferred by the Holder without the consent of the Company, subject only to the provisions
of Section 4.1 of the Securities Purchase Agreement.
(18) REISSUANCE
OF THIS NOTE.
(a) Transfer.
If this Note is to be transferred, the Holder shall surrender this Note to the Company, whereupon the Company will forthwith issue and
deliver upon the order of the Holder a new Note (in accordance with Section 18(d) and subject to Section 3(c)(iii)), registered as the
Holder may request, representing the outstanding Principal being transferred by the Holder and, if less than the entire outstanding Principal
is being transferred, a new Note (in accordance with Section 18(d)) to the Holder representing the outstanding Principal not being transferred.
The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of Section 3(c)(iii)
following redemption of any portion of this Note, the outstanding Principal represented by this Note may be less than the Principal stated
on the face of this Note.
(b) Lost,
Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Note, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company
in customary form (but without any obligation to post a surety or other bond) and, in the case of mutilation, upon surrender and cancellation
of this Note, the Company shall execute and deliver to the Holder a new Note (in accordance with Section 18(d)) representing the outstanding
Principal.
(c) Note
Exchangeable for Different Denominations. This Note is exchangeable, upon the surrender hereof by the Holder at the principal office
of the Company, for a new Note or Notes (in accordance with Section 18(d)) representing in the aggregate the outstanding Principal of
this Note, and each such new Note will represent such portion of such outstanding Principal as is designated by the Holder at the time
of such surrender.
(d) Issuance
of New Notes. Whenever the Company is required to issue a new Note pursuant to the terms of this Note, such new Note (i) shall be
of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding (or
in the case of a new Note being issued pursuant to Section 18(a) or Section 18(c), the Principal designated by the Holder which, when
added to the principal represented by the other new Notes issued in connection with such issuance, does not exceed the Principal remaining
outstanding under this Note immediately prior to such issuance of new Notes), (iii) shall have an issuance date, as indicated on the face
of such new Note, which is the same as the Issuance Date of this Note, (iv) shall have the same rights and conditions as this Note, and
(v) shall represent accrued and unpaid Interest, if any, from the Issuance Date.
(19) REMEDIES,
CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Note shall be cumulative and in
addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity (including a decree
of specific performance and/or other injunctive relief). No remedy contained herein shall be deemed
a waiver of compliance with the provisions giving rise to such remedy. Nothing herein shall limit the Holder’s right to pursue
actual and consequential damages for any failure by the Company to comply with the terms of this Note. The Company covenants to the Holder
that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided
for herein with respect to payments, redemption and the like (and the computation thereof) shall be the amounts to be received by the
Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof).
The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy
at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach,
the Holder shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity
of showing economic loss and without any bond or other security being required.
(20) PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Note is placed in the hands of an attorney for collection or enforcement or
is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this Note or to
enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization, receivership of the Company or other proceedings
affecting Company creditors’ rights and involving a claim under this Note, then the Company shall pay the costs incurred by the Holder
for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including,
but not limited to, attorneys’ fees and disbursements. The Company expressly acknowledges and agrees that no amounts due under this Note
shall be affected, or limited, by the fact that the purchase price paid for this Note was less than the original Principal amount hereof.
(21) CONSTRUCTION;
HEADINGS. This Note shall be deemed to be jointly drafted by the Company and all the Purchasers and shall not be construed against
any Person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part of, or affect the
interpretation of, this Note.
(22) FAILURE
OR INDULGENCE NOT WAIVER. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege. No waiver shall be effective unless it is in writing and signed by an authorized
representative of the waiving party.
(23) DISPUTE
RESOLUTION. In the case of a dispute as to the determination of any Redemption Price, the Company shall pay the applicable Redemption
Price that is not disputed, and the Company shall submit the disputed determinations or arithmetic calculations via electronic mail within
one (1) Business Day of receipt, or deemed receipt, of the Redemption Notice or other event giving rise to such dispute, as the case may
be, to the Holder. If the Holder and the Company are unable to agree upon such determination or calculation within one (1) Business Day
of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall, within one (1) Business
Day submit via electronic mail the disputed arithmetic calculation of any Redemption Price to an independent, outside accountant, selected
by the Holder and approved by the Company, such approval not to be unreasonably withheld, conditioned or delayed. The Company, at the
Company’s expense, shall cause the accountant to perform the determinations or calculations and notify the Company and the Holder of the
results no later than five (5) Business Days from the time it receives the disputed determinations or calculations. Such accountant’s
determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error.
(24) NOTICES;
PAYMENTS.
(a) Notices.
Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given in accordance with
Section 5.4 of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all actions taken
pursuant to this Note, including in reasonable detail a description of such action and the reason therefor.
(b) Payments.
Whenever any payment of cash is to be made by the Company to any Person pursuant to this Note, such payment shall be made in lawful money
of the United States of America via wire transfer of immediately available funds to an account designated by the Holder; provided,
that the Holder, upon written notice to the Company, may elect to receive a payment of cash in lawful money of the United States of America
by a check drawn on the account of the Company and sent via overnight courier service to such Person at such address as previously provided
to the Company in writing (which address, in the case of each of the Purchasers, shall initially be as set forth on the signature pages
attached to the Securities Purchase Agreement). Whenever any amount expressed to be due by the terms of this Note is due on any day which
is not a Business Day, the same shall instead be due on the next succeeding day which is a Business Day.
(25) CANCELLATION.
After all Principal, any accrued Interest and any other amounts at any time owed on this Note have been paid in full, this Note shall
automatically be deemed canceled and shall not be reissued, sold or transferred.
(26) WAIVER
OF NOTICE. To the extent permitted by law, the Company hereby waives demand, notice, protest and all other demands and notices in
connection with the delivery, acceptance, performance, default or enforcement of this Note and the Securities Purchase Agreement.
(27) GOVERNING
LAW; JURISDICTION; JURY TRIAL. This Note shall be governed by and construed and enforced in accordance with, and all questions concerning
the construction, validity, interpretation and performance of this Note shall be governed by, the internal laws of the State of New York,
without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the State of New York. The Company hereby irrevocably submits
to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding
is improper. The Company hereby irrevocably waives personal service of process and consents to process being served in any such suit,
action or proceeding by mailing a copy thereof to the Company at the address set forth on the Company’s signature page to the Securities
Purchase Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be
deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction
to collect on the Company’s obligations to the Holder, to realize on any collateral or any other security for such obligations, or to
enforce a judgment or other court ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND
AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR
ANY TRANSACTION CONTEMPLATED HEREBY.
(28) Severability.
If any provision of this Note is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction,
the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that
it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining
provisions of this Note so long as this Note as so modified continues to express, without material change, the original intentions of
the Company and the Holder as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s)
in question does not substantially impair the respective expectations or reciprocal obligations of the Company or the Holder or the practical
realization of the benefits that would otherwise be conferred upon the Company or the Holder. The Company and the Holder will endeavor
in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which
comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).
(29) DISCLOSURE.
Upon receipt or delivery by the Company of any notice in accordance with the terms of this Note, unless the Company has in good faith
determined that the matters relating to such notice do not constitute material, nonpublic information relating to the Company or its Subsidiaries,
the Company shall contemporaneously with any such receipt or delivery publicly disclose such material, nonpublic information on a Current
Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material, nonpublic information relating
to the Company or its Subsidiaries, the Company so shall indicate to the Holder contemporaneously with delivery of such notice, and in
the absence of any such indication, the Holder shall be allowed to presume that all matters relating to such notice do not constitute
material, nonpublic information relating to the Company or its Subsidiaries.
(30) USURY.
This Note is subject to the express condition that at no time shall the Company be obligated or required to pay interest hereunder at
a rate or in an amount which could subject the Holder to either civil or criminal liability as a result of being in excess of the maximum
interest rate or amount which the Company is permitted by applicable law to contract or agree to pay. If by the terms of this Note, the
Company is at any time required or obligated to pay interest hereunder, including by way of an original issue discount, at a rate or in
an amount in excess of such maximum rate or amount, the rate or amount of interest under this Note shall be deemed to be immediately reduced
to such maximum rate or amount and the interest payable shall be computed at such maximum rate or be in such maximum amount and all prior
interest payments in excess of such maximum rate or amount shall be applied and shall be deemed to have been payments in reduction of
the principal balance of this Note.
(31) CERTAIN
DEFINITIONS. For purposes of this Note, the following terms shall have the following meanings:
(a) “Affiliate”
shall have the meaning ascribed to such term in Rule 405 of the Securities Act.
(b) “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized
or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee”
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority
so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York, New York
generally are open for use by customers on such day.
(c) “Change
of Control” means any Fundamental Transaction other than (i) any reorganization, recapitalization or reclassification of the
Common Stock in which holders of the Company’s voting power immediately prior to such reorganization, recapitalization or reclassification
continue after such reorganization, recapitalization or reclassification to hold publicly traded securities and, directly or indirectly,
are the holders of a majority of the voting power of the surviving entity (or entities with the authority or voting power to elect the
members of the board of directors (or their equivalent if other than a corporation) of such entity or entities) after such reorganization,
recapitalization or reclassification or (ii) pursuant to a migratory merger effected solely for the purpose of changing the jurisdiction
of incorporation of the Company.
(d) “Closing
Date” shall have the meaning set forth in the Securities Purchase Agreement, which date is the date the Company initially issued
Notes pursuant to the terms of the Securities Purchase Agreement.
(e) “Common
Stock” means (i) the Company’s shares of common stock, par value $0.0001 per share, and (ii) any capital stock into
which such Common Stock shall be changed or any capital stock resulting from a reorganization, recapitalization or reclassification of
such Common Stock.
(f) “Contingent
Obligation” means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to
any Indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such
liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or
discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in
whole or in part) against loss with respect thereto.
(g) “Convertible
Securities” means any stock or securities (other than Options) directly or indirectly convertible into or exercisable or exchangeable
for shares of Common Stock.
(h) “Equity
Interests” means (a) all shares of capital stock (whether denominated as common capital stock or preferred capital stock), equity
interests, beneficial, partnership or membership interests, joint venture interests, participations or other ownership or profit interests
in or equivalents (regardless of how designated) of or in a Person (other than an individual), whether voting or non-voting and (b) all
securities convertible into or exchangeable for any of the foregoing and all warrants, Options or other rights to purchase, subscribe
for or otherwise acquire any of the foregoing, whether or not presently convertible, exchangeable or exercisable.
(i) “Exchange
Act” means the Securities Exchange Act of 1934, as amended.
(j) “Fundamental
Transaction” means (A) that the Company shall, directly or indirectly, including through Subsidiaries, Affiliates or otherwise,
in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation) another
Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of
the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation S-X) to one or more Subject Entities,
or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject to or have its Common Stock be subject
to or party to one or more Subject Entities making, a purchase, tender or exchange offer that is accepted by the holders of at least either
(x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of Common Stock calculated as if any shares of Common
Stock held by all Subject Entities making or party to, or Affiliated with any Subject Entities making or party to, such purchase, tender
or exchange offer were not outstanding; or (z) such number of shares of Common Stock such that all Subject Entities making or party to,
or Affiliated with any Subject Entity making or party to, such purchase, tender or exchange offer, become collectively the beneficial
owners (as defined in Rule 13d-3 under the Exchange Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate
a stock purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off
or scheme of arrangement) with one or more Subject Entities whereby such Subject Entities, individually or in the aggregate, acquire,
either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated
as if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject Entity making or
party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of Common Stock
such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the Exchange Act) of at least
50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its Common Stock, (B) that the Company shall,
directly or indirectly, including through Subsidiaries, Affiliates or otherwise, in one or more related transactions allow any Subject
Entity individually or the Subject Entities in the aggregate to be or become the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance, tender, tender offer,
exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination, reorganization, recapitalization,
spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner whatsoever, of either
(x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock, (y) at least 50% of the aggregate
ordinary voting power represented by issued and outstanding Common Stock not held by all such Subject Entities as of the Subscription
Date calculated as if any shares of Common Stock held by all such Subject Entities were not outstanding, or (z) a percentage of the aggregate
ordinary voting power represented by issued and outstanding shares of Common Stock or other equity securities of the Company sufficient
to allow such Subject Entities to effect a statutory short form merger or other transaction requiring other stockholders of the Company
to surrender their shares of Common Stock without approval of the stockholders of the Company or (C) that the Company shall, directly
or indirectly, including through Subsidiaries, Affiliates or otherwise, in one or more related transactions, the issuance of or the entering
into any other instrument or transaction structured in a manner to circumvent, or that circumvents, the intent of this definition in which
case this definition shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this definition
to the extent necessary to correct this definition or any portion of this definition which may be defective or inconsistent with the intended
treatment of such instrument or transaction.
(k) “GAAP”
means United States generally accepted accounting principles, consistently applied during the periods involved.
(l) “Group”
means a “group” as that term is used in Section 13(d) of the Exchange Act and as defined in Rule 13d-5 thereunder.
(m) “Indebtedness”
of any Person means, without duplication (i) all indebtedness for borrowed money, (ii) all obligations issued, undertaken or assumed as
the deferred purchase price of property or services, including (without limitation) “finance leases” in accordance with GAAP
(other than trade payables entered into in the ordinary course of business consistent with past practice), (iii) all reimbursement or
payment obligations with respect to letters of credit, surety bonds and other similar instruments, (iv) all obligations evidenced by notes,
bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property,
assets or businesses, (v) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred
as financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights
and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property),
(vi) all monetary obligations under any leasing or similar arrangement which, in connection with GAAP, is classified as a finance lease,
(vii) all indebtedness referred to in clauses (i) through (vi) above secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any mortgage, deed of trust, lien, pledge, charge, security interest or other encumbrance
of any nature whatsoever in or upon any property or assets (including accounts and contract rights) with respect to any asset or property
owned by any Person, even though the Person which owns such assets or property has not assumed or become liable for the payment of such
indebtedness, and (vii) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses
(i) through (vii) above.
(n) “Intellectual
Property Rights” shall have the meaning ascribed to such term in the Securities Purchase Agreement.
(o) “Material
Adverse Effect” shall have the meaning ascribed to such term in the Securities Purchase Agreement.
(p) “Options”
means any rights, warrants or options to subscribe for or purchase (i) shares of Common Stock or (ii) Convertible Securities.
(q) “Permitted
Indebtedness” means (i) Indebtedness evidenced by this Note and the Other Notes, (ii) trade payables incurred in the ordinary
course of business and consistent with past practice, (iii) unsecured Indebtedness incurred by the Company that is made expressly subordinate
in right of payment to the Indebtedness evidenced by this Note, as reflected in a written agreement acceptable to the Required Holders
and approved by the Required Holders in writing, and which Indebtedness (a) does not provide at any time for the payment, prepayment,
repayment, repurchase or defeasance, directly or indirectly, of any principal or premium, if any, thereon until ninety-one (91) days after
the Maturity Date or later and (b) includes terms and conditions acceptable to the Required Holders and (iv) Indebtedness, up to $50,000,
in the aggregate, secured by Permitted Liens described in clauses (iv) of the definition of Permitted Liens.
(r) “Permitted
Liens” means (i) any Lien for taxes not yet due or delinquent or being contested in good faith by appropriate proceedings for
which adequate reserves have been established in accordance with GAAP, (ii) any statutory Lien arising in the ordinary course of business
by operation of law with respect to a liability that is not yet due or delinquent, (iii) any Lien created by operation of law, such as
materialmen’s liens, mechanics’ liens and other similar liens, arising in the ordinary course of business with respect to a liability
that is not yet due or delinquent or that are being contested in good faith by appropriate proceedings, (iv) Liens (A) upon or in any
equipment acquired or held by the Company or any of its Subsidiaries to secure the purchase price of such equipment or Indebtedness incurred
solely for the purpose of financing the acquisition or lease of such equipment, or (B) existing on such equipment at the time of its acquisition,
provided that the Lien is confined solely to the property so acquired and improvements thereon, and the proceeds of such equipment, (v)
Liens incurred in connection with the extension, renewal or refinancing of the Indebtedness secured by Liens of the type described in
clause (iv) above, provided that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing
Lien and the principal amount of the Indebtedness being extended, renewed or refinanced does not increase, (vi) leases or subleases and
licenses and sublicenses granted to others in the ordinary course of the Company’s business, not interfering in any material respect with
the business of the Company and its Subsidiaries taken as a whole, (vii) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payments of custom duties in connection with the importation of goods and (viii) Liens arising from judgments,
decrees or attachments in circumstances not constituting an Event of Default under Section 4(a)(ix).
(s) “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and any governmental entity or any department or agency thereof.
(t) “Purchaser”
shall have the meaning ascribed to such term in the Securities Purchase Agreement.
(u) “Redemption
Dates” means, collectively, the Event of Default Redemption Dates and the Change of Control Redemption Dates and the Optional
Prepayment Date, as applicable, each of the foregoing, individually, a Redemption Date.
(v) “Redemption
Notices” means, collectively, the Event of Default Redemption Notices and the Change of Control Redemption Notices and the Optional
Prepayment Notice, each of the foregoing, individually, a Redemption Notice.
(w) “Redemption
Premium” means 125%.
(x) “Redemption
Prices” means, collectively, the Event of Default Redemption Prices and the Change of Control Redemption Prices and the Note
Amount being prepaid upon any Optional Prepayment, each of the foregoing, individually, a Redemption Price.
(y) “Related
Fund” means, with respect to any Person, a fund or account managed by such Person or an Affiliate of such Person.
(z) “Required
Holders” means the holders of Notes representing at least a majority of the aggregate principal amount of the Notes then outstanding.
(aa) “SEC”
means the United States Securities and Exchange Commission.
(bb) “Securities
Act” means the Securities Act of 1933, as amended.
(cc) “Securities
Purchase Agreement” means that certain securities purchase agreement dated as of the Subscription Date by and among the Company
and the investors listed on the signature pages attached thereto pursuant to which the Company issued the Notes and Warrants, as may be
amended, amended and restated, supplemented or otherwise modified from time to time.
(dd) “Subject Entity”
means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
(ee) “Subscription
Date” means June [●], 2024.
(ff) “Subsidiary”
shall have the meaning ascribed to such term in the Securities Purchase Agreement.
(gg) “Transaction
Documents” shall have the meaning ascribed to such term in the Securities Purchase Agreement.
(hh) “Warrants”
shall have the meaning ascribed to such term in the Securities Purchase Agreement, and shall include all warrants issued in exchange therefor
or replacement thereof.
[Signature Page Follows]
IN WITNESS WHEREOF, the Company
has caused this Note to be duly executed as of the Issuance Date set out above.
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Zoomcar Holdings, Inc. |
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Name: |
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Title: |
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Exhibit
10.3
REGISTRATION
RIGHTS AGREEMENT
This
Registration Rights Agreement (this “Agreement”) is made and entered into as of June [*], 2024, between Zoomcar
Holdings, Inc., a Delaware corporation (the “Company”), and each of the several purchasers signatory hereto
(each such purchaser, a “Purchaser” and, collectively, the “Purchasers”).
This
Agreement is made pursuant to the Securities Purchase Agreement, dated as of the date hereof, between the Company and each Purchaser
(the “Purchase Agreement”).
The
Company and each Purchaser hereby agrees as follows:
| 1. | Definitions.
Capitalized terms used and not otherwise defined herein that are defined in the Purchase
Agreement shall have the meanings given such terms in the Purchase Agreement. As used in
this Agreement, the following terms shall have the following meanings: |
1.1. “Advice”
shall have the meaning set forth in Section 6.3.
1.2. “Effectiveness
Date” means, with respect to the Initial Registration Statement required to be filed hereunder, forty-five (45) calendar
days following the Filing Date (or, in the event of a full review by the Commission, seventy-five (75) calendar days following the Filing
Date) and with respect to any additional Registration Statements which may be required pursuant to Section 2.3
or Section 3.3, forty-five (45) calendar days following the date on which an additional Registration
Statement is required to be filed hereunder (or, in the event of a full review by the Commission, ninety (90) calendar days following
the date such additional Registration Statement is required to be filed hereunder); provided, however, that in the event
the Company is notified by the Commission that one or more of the above Registration Statements will not be reviewed or is no longer
subject to further review and comments, the Effectiveness Date as to such Registration Statement shall be the fifth (5th) Trading Day
following the date on which the Company is so notified if such date precedes the dates otherwise required above, provided, further, if
such Effectiveness Date falls on a day that is not a Trading Day, then the Effectiveness Date shall be the next succeeding Trading Day.
1.3. “Effectiveness
Period” shall have the meaning set forth in Section 2.1.
1.4. “Event”
shall have the meaning set forth in Section 2.4.
1.5. “Event
Date” shall have the meaning set forth in Section 2.4.
1.6. “Filing
Date” means, with respect to the Initial Registration Statement required hereunder, the earlier of (a) fifteen (15) days
after the filing of the Company’s Annual Report on Form 10-K for fiscal year ended March 31, 2024 and (b) forty-five (45) days
after the date hereof and,, with respect to any additional Registration Statements which may be required pursuant to Section 2.3
or Section 3.3, the earliest practical date on which the Company is permitted by SEC Guidance
to file such additional Registration Statement related to the Registrable Securities.
1.7. “Holder”
or “Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities.
1.8. “Indemnified
Party” shall have the meaning set forth in Section 5.3.
1.9. “Indemnifying
Party” shall have the meaning set forth in Section 5.3.
1.10. “Initial
Registration Statement” means the initial Registration Statement filed pursuant to this Agreement.
1.11. “Losses”
shall have the meaning set forth in Section 5.1.
1.12. “Plan
of Distribution” shall have the meaning set forth in Section 2.1.
1.13. “Prospectus”
means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated by the
Commission pursuant to the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to
the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference
in such Prospectus.
1.14. “Registrable
Securities” means, as of any date of determination, (a) all Common Warrant Shares then issued and issuable upon exercise
of the Common Warrants (assuming on such date the Common Warrants are exercised in full without regard to any exercise limitations therein),
and (b) any securities issued or then issuable upon any stock split, dividend or other distribution, recapitalization or similar event
with respect to the foregoing; provided, however, that any such Registrable Securities shall cease to be Registrable Securities
(and the Company shall not be required to maintain the effectiveness of any, or file another, Registration Statement hereunder with respect
thereto) for so long as (a) a Registration Statement with respect to the sale of such Registrable Securities is declared effective by
the Commission under the Securities Act and such Registrable Securities have been disposed of by the Holder in accordance with such effective
Registration Statement, (b) such Registrable Securities have been previously sold in accordance with Rule 144, or (c) such securities
become eligible for resale and without the requirement for the Company to be in compliance with the current public information requirement
under Rule 144 (if such requirement is applicable) as set forth in a written opinion letter to such effect, addressed, delivered and
acceptable to the Transfer Agent and the affected Holders (assuming that such securities and any securities issuable upon exercise, conversion
or exchange of which, or as a dividend upon which, such securities were issued or are issuable, were at no time held by any Affiliate
of the Company, as reasonably determined by the Company, upon the advice of counsel to the Company.
1.15. “Registration
Statement” means any registration statement required to be filed hereunder pursuant to Section 2.1
and any additional registration statements contemplated by Section 2.3 or Section 3.3,
including (in each case) the Prospectus, amendments and supplements to any such registration statement or Prospectus, including pre-
and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference
in any such registration statement.
1.16. “Rule
415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect
as such Rule.
1.17. “Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect
as such Rule.
1.18. “Selling
Stockholder Questionnaire” shall have the meaning set forth in Section 3.1.
1.19. “SEC
Guidance” means (i) any publicly-available written or oral guidance of the Commission staff, or any comments, requirements
or requests of the Commission staff and (ii) the Securities Act.
2.1. On
or prior to each Filing Date, the Company shall prepare and file with the Commission a Registration Statement covering the resale of
all of the Registrable Securities that are not then registered on an effective Registration Statement for an offering to be made on a
continuous basis pursuant to Rule 415. Each Registration Statement filed hereunder shall be on Form S-1 (or Form S-3 to the extent the
Company is eligible to use such registration statement form, subject to the provisions of Section 2.5)
and shall contain (unless otherwise directed by at least 85% in interest of the Holders) substantially the “Plan of Distribution”
attached hereto as Annex 2.1.1 and substantially the “Selling Stockholders”
section attached hereto as Annex 2.1.2; provided, however, that no Holder
shall be required to be named as an “underwriter” without such Holder’s express prior written consent. Subject to the
terms of this Agreement, the Company shall use its best efforts to cause a Registration Statement filed under this Agreement (including,
without limitation, under Section 3.3) to be declared effective under the Securities Act as
promptly as possible after the filing thereof, but in any event no later than the applicable Effectiveness Date, and shall use its best
efforts to keep such Registration Statement continuously effective under the Securities Act until the date that all Registrable Securities
covered by such Registration Statement (i) have been sold, thereunder or pursuant to Rule 144, or (ii) may be sold without volume or
manner-of-sale restrictions pursuant to Rule 144 and without the requirement for the Company to be in compliance with the current public
information requirement under Rule 144 (to the extent applicable), as determined by the counsel to the Company pursuant to a written
opinion letter to such effect, addressed and acceptable to the Transfer Agent and the affected Holders (the “Effectiveness
Period”). The Company shall telephonically request effectiveness of a Registration Statement as of 5:00 p.m. (New York
City time) on a Trading Day. The Company shall immediately notify the Holders via facsimile or by e-mail of the effectiveness of a Registration
Statement on the same Trading Day that the Company telephonically confirms effectiveness with the Commission, which shall be the date
requested for effectiveness of such Registration Statement. The Company shall, by 9:30 a.m. (New York City time) on the Trading Day after
the effective date of such Registration Statement, file a final Prospectus with the Commission as required by Rule 424. Failure to so
notify the Holder within one (1) Trading Day of such notification of effectiveness or failure to file a final Prospectus as foresaid
shall be deemed an Event under Section 2.4.
2.2. Notwithstanding
the registration obligations set forth in Section 2.1, if the Commission informs the Company
that all of the Registrable Securities cannot, as a result of the application of Rule 415, be registered for resale as a secondary offering
on a single registration statement, the Company agrees to promptly inform each of the Holders thereof and use its commercially reasonable
efforts to file amendments to the Initial Registration Statement as required by the Commission, covering the maximum number of Registrable
Securities permitted to be registered by the Commission, on Form S-1 (or Form S-3 to the extent the Company is eligible to use such registration
statement form) or such other form available to register for resale the Registrable Securities as a secondary offering, subject to the
provisions of Section 2.5; with respect to filing on Form S-1 (or Form S-3 to the extent the
Company is eligible to use such registration statement form) or other appropriate form, and subject to the provisions of Section 2.4
with respect to the payment of liquidated damages; provided, however, that prior to filing such amendment, the Company
shall be obligated to use diligent efforts to advocate with the Commission for the registration of all of the Registrable Securities
in accordance with the SEC Guidance, including without limitation, Compliance and Disclosure Interpretation 612.09.
2.3. Notwithstanding
any other provision of this Agreement and subject to the payment of liquidated damages pursuant to Section 2.4,
if the Commission or any SEC Guidance sets forth a limitation on the number of Registrable Securities permitted to be registered on a
particular Registration Statement as a secondary offering (and notwithstanding that the Company used diligent efforts to advocate with
the Commission for the registration of all or a greater portion of Registrable Securities), unless otherwise directed in writing by a
Holder as to its Registrable Securities, the number of Registrable Securities to be registered on such Registration Statement will be
reduced as follows:
2.3.1. First,
the Company shall reduce or eliminate any securities to be included other than Registrable Securities; and
2.3.2. Second,
the Company shall reduce Registrable Securities (applied to the Holders on a pro rata basis based on the total number of unregistered
Registrable Securities held by such Holders).
In
the event of a cutback hereunder, the Company shall give the Holder at least five (5) Trading Days prior written notice along with the
calculations as to such Holder’s allotment. In the event the Company amends the Initial Registration Statement in accordance with
the foregoing, the Company will use its best efforts to file with the Commission, as promptly as allowed by Commission or SEC Guidance
provided to the Company or to registrants of securities in general, one or more registration statements on Form S-3 or such other form
available to register for resale those Registrable Securities that were not registered for resale on the Initial Registration Statement,
as amended.
2.4. If:
(i) the Initial Registration Statement is not filed on or prior to its Filing Date (if the Company files the Initial Registration Statement
without affording the Holders the opportunity to review and comment on the same as required by Section 3.1
herein or the Company subsequently withdraws the filing of the Registration Statement, the Company shall be deemed to have not satisfied
this clause (i)) as of the Filing Date, or (ii) the Company fails to file with the Commission a request for acceleration of a Registration
Statement in accordance with Rule 461 promulgated by the Commission pursuant to the Securities Act, within five Trading Days of the date
that the Company is notified (orally or in writing, whichever is earlier) by the Commission that such Registration Statement will not
be “reviewed” or will not be subject to further review, or (iii) prior to the effective date of a Registration Statement,
the Company fails to file a pre-effective amendment and otherwise respond in writing to comments made by the Commission in respect of
such Registration Statement within ten (10) calendar days after the receipt of comments by or notice from the Commission that such amendment
is required in order for such Registration Statement to be declared effective, or (iv) a Registration Statement registering for resale
all of the Registrable Securities is not declared effective by the Commission by the Effectiveness Date of the Initial Registration Statement
(provided if the Registration Statement does not allow for the resale of Registrable Securities at prevailing market prices (i.e., only
allows for fixed price sales), the Company shall have been deemed to have not satisfied this clause), or (v) after the effective date
of a Registration Statement, such Registration Statement ceases for any reason to remain continuously effective as to all Registrable
Securities included in such Registration Statement, or the Holders are otherwise not permitted to utilize the Prospectus therein to resell
such Registrable Securities, for more than ten (10) consecutive calendar days or more than an aggregate of fifteen (15) calendar days
(which need not be consecutive calendar days) during any 12-month period (any such failure or breach being referred to as an “Event”,
and for purposes of clauses (i) and (iv), the date on which such Event occurs, and for purpose of clause (ii) the date on which such
five (5) Trading Day period is exceeded, and for purpose of clause (iii) the date which such ten (10) calendar day period is exceeded,
and for purpose of clause (v) the date on which such ten (10) or fifteen (15) calendar day period, as applicable, is exceeded being referred
to as “Event Date”), then, in addition to any other rights the Holders may have hereunder or under applicable
law, on each such Event Date and on each monthly anniversary of each such Event Date (if the applicable Event shall not have been cured
by such date) until the applicable Event is cured, the Company shall pay to each Holder an amount in cash, as partial liquidated damages
and not as a penalty, equal to the product of 2.0% multiplied by the aggregate Subscription Amount paid by such Holder pursuant to the
Purchase Agreement. The parties agree that the maximum aggregate liquidated damages payable to a Holder under this Agreement shall be
the aggregate Subscription Amount paid by such Holder pursuant to the Securities Purchase Agreement. If the Company fails to pay any
partial liquidated damages pursuant to this Section 2.4 in full within seven days after the
date payable, the Company will pay interest thereon at a rate of 15% per annum (or such lesser maximum amount that is permitted to be
paid by applicable law) to the Holder, accruing daily from the date such partial liquidated damages are due until such amounts, plus
all such interest thereon, are paid in full. The partial liquidated damages pursuant to the terms hereof shall apply on a daily pro rata
basis for any portion of a month prior to the cure of an Event.
2.5. If
Form S-3 is not available for the registration of the resale of Registrable Securities hereunder, the Company shall (i) register the
resale of the Registrable Securities on another appropriate form and (ii) undertake to register the Registrable Securities on Form S-3
as soon as such form is available, provided that the Company shall maintain the effectiveness of the Registration Statement then in effect
until such time as a Registration Statement on Form S-3 covering the Registrable Securities has been declared effective by the Commission.
2.6. Notwithstanding
anything to the contrary contained herein, in no event shall the Company be permitted to name any Holder or affiliate of a Holder as
any Underwriter without the prior written consent of such Holder.
| 3. | Registration
Procedures. In connection with the Company’s registration obligations hereunder,
the Company shall: |
3.1. Not
less than five (5) Trading Days prior to the filing of each Registration Statement and not less than one (1) Trading Day prior to the
filing of any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated or deemed
to be incorporated therein by reference), the Company shall (i) furnish to each Holder copies of all such documents proposed to be filed,
which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the review of such Holders,
and (ii) cause its officers and directors, counsel and independent registered public accountants to respond to such inquiries as shall
be necessary, in the reasonable opinion of respective counsel to each Holder, to conduct a reasonable investigation within the meaning
of the Securities Act. The Company shall not file a Registration Statement or any such Prospectus or any amendments or supplements thereto
to which the Holders of a majority of the Registrable Securities shall reasonably object in good faith, provided that, the Company is
notified of such objection in writing no later than five (5) Trading Days after the Holders have been so furnished copies of a Registration
Statement or one (1) Trading Day after the Holders have been so furnished copies of any related Prospectus or amendments or supplements
thereto. Each Holder agrees to furnish to the Company a completed questionnaire in the form attached to this Agreement as Annex 3.1
(a “Selling Stockholder Questionnaire”) on a date that is not less than two (2) Trading Days prior to the
Filing Date or by the end of the fourth (4th) Trading Day following the date on which such Holder receives draft materials
in accordance with this Section.
3.2. (i)
Prepare and file with the Commission such amendments, including post-effective amendments, to a Registration Statement and the Prospectus
used in connection therewith as may be necessary to keep a Registration Statement continuously effective as to the applicable Registrable
Securities for the Effectiveness Period and prepare and file with the Commission such additional Registration Statements in order to
register for resale under the Securities Act all of the Registrable Securities, (ii) cause the related Prospectus to be amended or supplemented
by any required Prospectus supplement (subject to the terms of this Agreement), and, as so supplemented or amended, to be filed pursuant
to Rule 424, (iii) respond as promptly as reasonably possible to any comments received from the Commission with respect to a Registration
Statement or any amendment thereto and provide as promptly as reasonably possible to the Holders true and complete copies of all correspondence
from and to the Commission relating to a Registration Statement (provided that, the Company shall excise any information contained therein
which would constitute material non-public information regarding the Company), and (iv) comply in all material respects with the applicable
provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Registration
Statement during the applicable period in accordance (subject to the terms of this Agreement) with the intended methods of disposition
by the Holders thereof set forth in such Registration Statement as so amended or in such Prospectus as so supplemented.
3.3. If
during the Effectiveness Period, the number of Registrable Securities at any time exceeds 100% of the number of shares of Common Stock
then registered in a Registration Statement, then the Company shall file as soon as reasonably practicable, but in any case prior to
the applicable Filing Date, an additional Registration Statement covering the resale by the Holders of not less than the number of such
Registrable Securities.
3.4. Notify
the Holders of Registrable Securities to be sold (which notice shall, pursuant to clauses (iii) through (vi) hereof, be accompanied by
an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably possible (and,
in the case of (i)(A) below, not less than one (1) Trading Day prior to such filing) and (if requested by any such Person) confirm such
notice in writing no later than one (1) Trading Day following the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective
amendment to a Registration Statement is proposed to be filed, (B) when the Commission notifies the Company whether there will be a “review”
of such Registration Statement and whenever the Commission comments in writing on such Registration Statement, and (C) with respect to
a Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any request by the Commission or
any other federal or state governmental authority for amendments or supplements to a Registration Statement or Prospectus or for additional
information, (iii) of the issuance by the Commission or any other federal or state governmental authority of any stop order suspending
the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings
for that purpose, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding
for such purpose, (v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration
Statement ineligible for inclusion therein or any statement made in a Registration Statement or Prospectus or any document incorporated
or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to a Registration Statement,
Prospectus or other documents so that, in the case of a Registration Statement or the Prospectus, as the case may be, it will not contain
any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading, and (vi) of the occurrence or existence of any pending
corporate development with respect to the Company that the Company believes may be material and that, in the determination of the Company,
makes it not in the best interest of the Company to allow continued availability of a Registration Statement or Prospectus; provided,
however, that in no event shall any such notice contain any information which would constitute material, non-public information
regarding the Company and the Company agrees that the Holders shall not have any duty of confidentiality to the Company and shall not
have any duty to the Company not to trade on the basis of such information.
3.5. Use
its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order stopping or suspending the effectiveness
of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest practicable moment.
3.6. Furnish
to each Holder, without charge, at least one conformed copy of each such Registration Statement and each amendment thereto, including
financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference to the extent requested
by such Person, and all exhibits to the extent requested by such Person (including those previously furnished or incorporated by reference)
promptly after the filing of such documents with the Commission, provided that any such item which is available on the EDGAR system (or
successor thereto) need not be furnished in physical form.
3.7. Subject
to the terms of this Agreement, the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by
each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any
amendment or supplement thereto, except after the giving of any notice pursuant to Section 3.4.
3.8. Prior
to any resale of Registrable Securities by a Holder, use its commercially reasonable efforts to register or qualify or cooperate with
the selling Holders in connection with the registration or qualification (or exemption from the Registration or qualification) of such
Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such jurisdictions within the United States
as any Holder reasonably requests in writing, to keep each registration or qualification (or exemption therefrom) effective during the
Effectiveness Period and to do any and all other acts or things reasonably necessary to enable the disposition in such jurisdictions
of the Registrable Securities covered by each Registration Statement, provided that the Company shall not be required to qualify generally
to do business in any jurisdiction where it is not then so qualified, subject the Company to any material tax in any such jurisdiction
where it is not then so subject or file a general consent to service of process in any such jurisdiction.
3.9. If
requested by a Holder, cooperate with such Holder to facilitate the timely preparation and delivery of certificates representing Registrable
Securities to be delivered to a transferee pursuant to a Registration Statement, which certificates shall be free, to the extent permitted
by the Purchase Agreement, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered
in such names as any such Holder may request.
3.10. Upon
the occurrence of any event contemplated by Section 3.4, as promptly as reasonably possible
under the circumstances taking into account the Company’s good faith assessment of any adverse consequences to the Company and
its stockholders of the premature disclosure of such event, prepare a supplement or amendment, including a post-effective amendment,
to a Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein
by reference, and file any other required document so that, as thereafter delivered, neither a Registration Statement nor such Prospectus
will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were made, not misleading. If the Company notifies the Holders
in accordance with clauses (iii) through (vi) of Section 3.4 above to suspend the use of any
Prospectus until the requisite changes to such Prospectus have been made, then the Holders shall suspend use of such Prospectus. The
Company will use its best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company
shall be entitled to exercise its right under this Section 3.10 to suspend the availability
of a Registration Statement and Prospectus, subject to the payment of partial liquidated damages otherwise required pursuant to Section
2.4, for a period not to exceed 60 calendar days (which need not be consecutive days) in any
12-month period.
3.11. Otherwise
use commercially reasonable efforts to comply with all applicable rules and regulations of the Commission under the Securities Act and
the Exchange Act, including, without limitation, Rule 172 under the Securities Act, file any final Prospectus, including any supplement
or amendment thereof, with the Commission pursuant to Rule 424 under the Securities Act, promptly inform the Holders in writing if, at
any time during the Effectiveness Period, the Company does not satisfy the conditions specified in Rule 172 and, as a result thereof,
the Holders are required to deliver a Prospectus in connection with any disposition of Registrable Securities and take such other actions
as may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder.
3.12. The
Company shall use its best efforts to maintain eligibility for use of Form S-3 (or any successor form thereto) for the registration of
the resale of Registrable Securities.
3.13. The
Company may require each selling Holder to furnish to the Company a certified statement as to the number of shares of Common Stock beneficially
owned by such Holder and, if required by the Commission, the natural persons thereof that have voting and dispositive control over the
Common Stock. During any periods that the Company is unable to meet its obligations hereunder with respect to the registration of the
Registrable Securities solely because any Holder fails to furnish such information within three Trading Days of the Company’s request,
any liquidated damages that are accruing at such time as to such Holder only shall be tolled and any Event that may otherwise occur solely
because of such delay shall be suspended as to such Holder only, until such information is delivered to the Company.
| 4. | Registration
Expenses. All fees and expenses incident to the performance of, or compliance with,
this Agreement by the Company shall be borne by the Company whether or not any Registrable
Securities are sold pursuant to a Registration Statement. The fees and expenses referred
to in the foregoing sentence shall include, without limitation, (i) all registration and
filing fees (including, without limitation, fees and expenses of the Company’s counsel
and independent registered public accountants) (A) with respect to filings made with the
Commission, (B) with respect to filings required to be made with any Trading Market on which
the Common Stock is then listed for trading, and (C) in compliance with applicable state
securities or Blue Sky laws reasonably agreed to by the Company in writing (including, without
limitation, fees and disbursements of counsel for the Company in connection with Blue Sky
qualifications or exemptions of the Registrable Securities), (ii) printing expenses (including,
without limitation, expenses of printing certificates for Registrable Securities), (iii)
messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the
Company, (v) Securities Act liability insurance, if the Company so desires such insurance
to be purchased at the sole discretion of the Company, and (vi) fees and expenses of all
other Persons retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement. In addition, the Company shall be responsible for all of
its internal expenses incurred in connection with the consummation of the transactions contemplated
by this Agreement (including, without limitation, all salaries and expenses of its officers
and employees performing legal or accounting duties), the expense of any annual audit and
the fees and expenses incurred in connection with the listing of the Registrable Securities
on any securities exchange as required hereunder. In no event shall the Company be responsible
for any broker or similar commissions of any Holder or, except to the extent provided for
in the Transaction Documents, any legal fees or other costs of the Holders. |
5.1. Indemnification
by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder,
the officers, directors, members, partners, agents, brokers (including brokers who offer and sell Registrable Securities as principal
as a result of a pledge or any failure to perform under a margin call of Common Stock), investment advisors and employees (and any other
Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title)
of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) and the officers, directors, members, stockholders, partners, agents and employees (and any other Persons with a functionally
equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of each such controlling Person,
to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including,
without limitation, reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising
out of or relating to (1) any untrue or alleged untrue statement of a material fact contained in a Registration Statement, any Prospectus
or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to
any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the
case of any Prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading or (2) any violation
or alleged violation by the Company of the Securities Act, the Exchange Act or any state securities law, or any rule or regulation thereunder,
in connection with the performance of its obligations under this Agreement, except to the extent, but only to the extent, that (i) such
untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder
expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution
of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in a Registration Statement,
such Prospectus or in any amendment or supplement thereto (it being understood that the Holder has approved Annex 2.1.1 hereto for
this purpose) or (ii) in the case of an occurrence of an event of the type specified in Section 3.4(iii)-(vi), the use by such Holder
of an outdated, defective or otherwise unavailable Prospectus after the Company has notified such Holder in writing that the Prospectus
is outdated, defective or otherwise unavailable for use by such Holder and prior to the receipt by such Holder of the Advice contemplated
in Section 6.3. The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding arising
from or in connection with the transactions contemplated by this Agreement of which the Company is aware. Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf of such indemnified person and shall survive the transfer
of any Registrable Securities by any of the Holders in accordance with Section 6.7.
5.2. Indemnification
by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents
and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange
Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law,
from and against all Losses, as incurred, to the extent arising out of or based solely upon: any untrue or alleged untrue statement of
a material fact contained in any Registration Statement, any Prospectus, or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary
to make the statements therein (in the case of any Prospectus or supplement thereto, in light of the circumstances under which they were
made) not misleading (i) to the extent, but only to the extent, that such untrue statement or omission is contained in any information
so furnished in writing by such Holder to the Company expressly for inclusion in such Registration Statement or such Prospectus or (ii)
to the extent, but only to the extent, that such information relates to such Holder’s information provided in the Selling Stockholder
Questionnaire or the proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by
such Holder expressly for use in a Registration Statement (it being understood that the Holder has approved Annex 2.1.1 hereto for
this purpose), such Prospectus or in any amendment or supplement thereto. In no event shall the liability of a selling Holder be greater
in amount than the dollar amount of the proceeds (net of all expenses paid by such Holder in connection with any claim relating to this
Section 5 and the amount of any damages such Holder has otherwise been required to pay by reason of such untrue statement or omission)
received by such Holder upon the sale of the Registrable Securities included in the Registration Statement giving rise to such indemnification
obligation.
5.3. Conduct
of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder
(an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought
(the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume the defense
thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses
incurred in connection with defense thereof, provided that the failure of any Indemnified Party to give such notice shall not relieve
the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be
finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure
shall have materially and adversely prejudiced the Indemnifying Party.
An
Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party
has agreed in writing to pay such fees and expenses, (2) the Indemnifying Party shall have failed promptly to assume the defense of such
Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding, or (3) the named parties to
any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and counsel to
the Indemnified Party shall reasonably believe that a material conflict of interest is likely to exist if the same counsel were to represent
such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing
that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to
assume the defense thereof and the reasonable fees and expenses of no more than one separate counsel shall be at the expense of the Indemnifying
Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld or delayed. No Indemnifying Party shall, without the prior written consent of the Indemnified
Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes
an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.
Subject
to the terms of this Agreement, all reasonable fees and expenses of the Indemnified Party (including reasonable fees and expenses to
the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section)
shall be paid to the Indemnified Party, as incurred, within ten Trading Days of written notice thereof to the Indemnifying Party, provided
that the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and expenses applicable to such
actions for which such Indemnified Party is finally determined by a court of competent jurisdiction (which determination is not subject
to appeal or further review) not to be entitled to indemnification hereunder.
5.4. Contribution.
If the indemnification under Section 5.1 or 5.2 is unavailable to an Indemnified Party or insufficient to hold an Indemnified
Party harmless for any Losses, then each Indemnifying Party shall contribute to the amount paid or payable by such Indemnified Party,
in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with
the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative
fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has
been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement, any
reasonable attorneys’ or other fees or expenses incurred by such party in connection with any Proceeding to the extent such party
would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party
in accordance with its terms.
The
parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5.4 were determined by pro
rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the
immediately preceding paragraph. In no event shall the contribution obligation of a Holder of Registrable Securities be greater in amount
than the dollar amount of the proceeds (net of all expenses paid by such Holder in connection with any claim relating to this Section
5 and the amount of any damages such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement
or omission or alleged omission) received by it upon the sale of the Registrable Securities giving rise to such contribution obligation.
The
indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have
to the Indemnified Parties.
6.1. Remedies.
In the event of a breach by the Company or by a Holder of any of their respective obligations under this Agreement, each Holder or the
Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including
recovery of damages, shall be entitled to specific performance of its rights under this Agreement. Each of the Company and each Holder
agrees that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach,
it shall not assert or shall waive the defense that a remedy at law would be adequate.
6.2. No
Piggyback on Registrations; Prohibition on Filing Other Registration Statements. Neither the Company nor any of its security
holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in any Registration Statements
other than the Registrable Securities. The Company shall not file any other registration statements until all Registrable Securities
are registered pursuant to a Registration Statement that is declared effective by the Commission, provided that this Section 6.2
shall not prohibit the Company from filing amendments to registration statements filed prior to the date of this Agreement.
6.3. Discontinued
Disposition. By its acquisition of Registrable Securities, each Holder agrees that, upon receipt of a notice from the Company
of the occurrence of any event of the kind described in Section 3.4(iii) through (vi), such Holder will forthwith discontinue disposition
of such Registrable Securities under a Registration Statement until it is advised in writing (the “Advice”)
by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company will
use its best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company agrees and acknowledges
that any periods during which the Holder is required to discontinue the disposition of the Registrable Securities hereunder shall be
subject to the provisions of Section 2.4.
6.4. Piggy-Back
Registrations. If, at any time during the Effectiveness Period, there is not an effective Registration Statement covering all
of the Registrable Securities and the Company shall determine to prepare and file with the Commission a registration statement relating
to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form
S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely
in connection with any acquisition of any entity or business or equity securities issuable in connection with the Company’s stock
option or other employee benefit plans, then the Company shall deliver to each Holder a written notice of such determination and, if
within fifteen days after the date of the delivery of such notice, any such Holder shall so request in writing, the Company shall include
in such registration statement all or any part of such Registrable Securities such Holder requests to be registered; provided,
however, that the Company shall not be required to register any Registrable Securities pursuant to this Section 6.4 that
are eligible for resale pursuant to Rule 144 (without volume restrictions and provided the Company is in compliance with the current
public information requirement under Rule 144) promulgated by the Commission pursuant to the Securities Act or that are the subject of
a then effective Registration Statement that is available for resales or other dispositions by such Holder.
6.5. Amendments
and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by
the Company and the Holders of 50.1% or more of the then outstanding Registrable Securities (for purposes of clarification, this includes
any Registrable Securities issuable upon exercise or conversion of any Security); provided that no such amendment, action or omission
that adversely affects, alters or changes the interests of any Holder in a manner disproportionate to the other Holders shall be effective
against such Holder without the prior written consent of such Holder. If a Registration Statement does not register all of the Registrable
Securities pursuant to a waiver or amendment done in compliance with the previous sentence, then the number of Registrable Securities
to be registered for each Holder shall be reduced pro rata among all Holders and each Holder shall have the right to designate which
of its Registrable Securities shall be omitted from such Registration Statement. Notwithstanding the foregoing, a waiver or consent to
depart from the provisions hereof with respect to a matter that relates exclusively to the rights of a Holder or some Holders and that
does not directly or indirectly affect the rights of other Holders may be given only by such Holder or Holders of all of the Registrable
Securities to which such waiver or consent relates; provided, however, that the provisions of this sentence may not be
amended, modified, or supplemented except in accordance with the provisions of the first sentence of this Section 6.5. No consideration
shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the
same consideration also is offered to all of the parties to this Agreement.
6.6. Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be delivered as set forth
in the Purchase Agreement.
6.7. Successors
and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of
the parties and shall inure to the benefit of each Holder. The Company may not assign (except by merger) its rights or obligations hereunder
without the prior written consent of all of the Holders of the then outstanding Registrable Securities. Each Holder may assign their
respective rights hereunder in the manner and to the Persons as permitted under the Purchase Agreement.
6.8. No
Inconsistent Agreements. Except as set forth on Schedule 6.8, the Company has not entered, as of the date hereof, nor shall the
Company, on or after the date of this Agreement, enter into any agreement with respect to its securities, that would have the effect
of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. Except as set forth
on Schedule 6.8, the Company has not previously entered into any agreement granting any registration rights with respect
to any of its securities to any Person that have not been satisfied in full.
6.9. Execution
and Counterparts. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered
one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party,
it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by e-mail delivery
of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such “.pdf” signature page were an original thereof.
6.10. Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be determined
in accordance with the provisions of the Purchase Agreement.
6.11. Cumulative
Remedies. The remedies provided herein are cumulative and not exclusive of any other remedies provided by law.
6.12. Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force
and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts
to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
6.13. Headings.
The headings in this Agreement are for convenience only, do not constitute a part of the Agreement and shall not be deemed to limit or
affect any of the provisions hereof.
6.14. Independent
Nature of Holders’ Obligations and Rights. The obligations of each Holder hereunder are several and not joint with the
obligations of any other Holder hereunder, and no Holder shall be responsible in any way for the performance of the obligations of any
other Holder hereunder. Nothing contained herein or in any other agreement or document delivered at any closing, and no action taken
by any Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture
or any other kind of group or entity, or create a presumption that the Holders are in any way acting in concert or as a group or entity
with respect to such obligations or the transactions contemplated by this Agreement or any other matters, and the Company acknowledges
that the Holders are not acting in concert or as a group, and the Company shall not assert any such claim, with respect to such obligations
or transactions. Each Holder shall be entitled to protect and enforce its rights, including without limitation the rights arising out
of this Agreement, and it shall not be necessary for any other Holder to be joined as an additional party in any proceeding for such
purpose. The use of a single agreement with respect to the obligations of the Company contained was solely in the control of the Company,
not the action or decision of any Holder, and was done solely for the convenience of the Company and not because it was required or requested
to do so by any Holder. It is expressly understood and agreed that each provision contained in this Agreement is between the Company
and a Holder, solely, and not between the Company and the Holders collectively and not between and among Holders.
[ZCAR
Registration Rights Agreement Signature Pages Follow]
[ZCAR
Registration Rights Agreement – Company Signature Page]
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.
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ZOOMCAR HOLDINGS, INC. |
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[ZCAR
Registration Rights Agreement – Holder Signature Page]
Name of Holder: |
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Signature of Authorized Signatory of Holder: |
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Name of Authorized Signatory: |
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Title of Authorized Signatory: |
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Email Address of Authorized Signatory: |
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Annex
2.1.1
Plan
of Distribution
Each
Selling Stockholder (the “Selling Stockholders”) of the securities and any of their pledgees, assignees and successors-in-interest
may, from time to time, sell any or all of their securities covered hereby on the principal Trading Market or any other stock exchange,
market or trading facility on which the securities are traded or in private transactions. These sales may be at fixed or negotiated prices.
A Selling Stockholder may use any one or more of the following methods when selling securities:
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ordinary
brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
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block
trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block
as principal to facilitate the transaction; |
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purchases
by a broker-dealer as principal and resale by the broker-dealer for its account; |
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an
exchange distribution in accordance with the rules of the applicable exchange; |
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privately
negotiated transactions; |
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settlement
of short sales; |
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in
transactions through broker-dealers that agree with the Selling Stockholders to sell a specified number of such securities at a stipulated
price per security; |
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through
the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; |
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combination of any such methods of sale; or |
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any
other method permitted pursuant to applicable law. |
The
Selling Stockholders may also sell securities under Rule 144 or any other exemption from registration under the Securities Act of 1933,
as amended (the “Securities Act”), if available,
rather than under this prospectus.
Broker-dealers
engaged by the Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser)
in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction not in
excess of a customary brokerage commission in compliance with FINRA Rule 2121; and in the case of a principal transaction a markup or
markdown in compliance with FINRA Rule 2121.
In
connection with the sale of the securities or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they
assume. The Selling Stockholders may also sell securities short and deliver these securities to close out their short positions, or loan
or pledge the securities to broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter into option
or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the
delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer
or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The
Selling Stockholders and any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters”
within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers
or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act. Each Selling Stockholder has informed the Company that it does not have any written or oral agreement or understanding,
directly or indirectly, with any person to distribute the securities.
The
Company is required to pay certain fees and expenses incurred by the Company incident to the registration of the securities. The Company
has agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under
the Securities Act.
We
agreed to keep this prospectus effective until the earlier of (i) the date on which the securities may be resold by the Selling Stockholders
without registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for
the Company to be in compliance with the current public information under Rule 144 under the Securities Act or any other rule of similar
effect or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule
of similar effect. The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable
state securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered
or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is
complied with.
Under
applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously
engage in market making activities with respect to the Common Stock for the applicable restricted period, as defined in Regulation M,
prior to the commencement of the distribution. In addition, the Selling Stockholders will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the
Common Stock by the Selling Stockholders or any other person. We will make copies of this prospectus available to the Selling Stockholders
and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including
by compliance with Rule 172 under the Securities Act).
Annex
2.1.2
SELLING
STOCKHOLDERS
The
Common Warrant Shares being offered by the selling stockholders are those previously issued to the selling stockholders, and those issuable
to the selling stockholders, upon exercise of the Common Warrants. For additional information regarding the issuances of those Common
Warrant Shares and Common Warrants, see “Private Placement of shares of Common Stock and Warrants” above. We are registering
the Common Warrant Shares in order to permit the selling stockholders to offer the Common Warrant Shares for resale from time to time.
Except for the ownership of the Common Warrant Shares and the Common Warrants, the selling stockholders have not had any material relationship
with us within the past three years.
The
table below lists the selling stockholders and other information regarding the beneficial ownership of the Common Warrant Shares by each
of the selling stockholders. The second column lists the number of Common Warrant Shares beneficially owned by each selling stockholder,
based on its ownership of the Common Warrant Shares and Warrants, as of [●], 2024, assuming exercise of the Common Warrants held
by the selling stockholders on that date, without regard to any limitations on exercises.
The
third column lists the Common Warrant Shares being offered by this prospectus by the selling stockholders.
In
accordance with the terms of a registration rights agreement with the selling stockholders, this prospectus generally covers the resale
of the sum of (i) the Common Warrant Shares issued to the selling stockholders in the “Private Placement of shares of Common Stock
and Warrants” described above and (ii) the maximum number of Common Warrant Shares issuable upon exercise of the related warrants,
determined as if the outstanding Common Warrants were exercised in full as of the trading day immediately preceding the date this registration
statement was initially filed with the SEC, each as of the trading day immediately preceding the applicable date of determination and
all subject to adjustment as provided in the registration rights agreement, without regard to any limitations on the exercise of the
Common Warrants. The fourth column assumes the sale of all of the Common Warrant Shares offered by the selling stockholders pursuant
to this prospectus.
Under
the terms of the Common Warrants, a selling stockholder may not exercise the warrants to the extent such exercise would cause such selling
stockholder, together with its affiliates and attribution parties, to beneficially own a number of shares of Common Stock which would
exceed 4.99% or 9.99%, as applicable, of our then outstanding Common Stock following such exercise, excluding for purposes of such determination
shares of Common Stock issuable upon exercise of the warrants that have not been exercised. The number of Common Stock in the second
column does not reflect this limitation. The selling stockholders may sell all, some or none of their Common Stock in this offering.
See “Plan of Distribution.”
Name
of Selling Stockholder |
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Number
of shares of
Common Stock
Owned Prior to
Offering |
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Maximum
Number of
shares of Common
Stock to be Sold
Pursuant to this
Prospectus |
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of shares of
Common Stock
Owned After
Offering |
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Annex
3.1
ZOOMCAR
HOLDINGS, INC.
Selling
Stockholder Notice and Questionnaire
The
undersigned beneficial owner of shares of Common Stock (the “Registrable Securities”) of Zoomcar Holdings,
Inc., a Delaware corporation (the “Company”), understands that the Company has filed or intends to file with
the Securities and Exchange Commission (the “Commission”) a registration statement (the “Registration
Statement”) for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities
Act”), of the Registrable Securities, in accordance with the terms of the Registration Rights Agreement (the “Registration
Rights Agreement”) to which this document is annexed. A copy of the Registration Rights Agreement is available from the
Company upon request at the address set forth below. All capitalized terms not otherwise defined herein shall have the meanings ascribed
thereto in the Registration Rights Agreement.
Certain
legal consequences arise from being named as a selling stockholder in the Registration Statement and the related prospectus. Accordingly,
holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences
of being named or not being named as a selling stockholder in the Registration Statement and the related prospectus.
NOTICE
The
undersigned beneficial owner (the “Selling Stockholder”) of Registrable Securities hereby elects to include
the Registrable Securities owned by it in the Registration Statement.
The
undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate:
QUESTIONNAIRE
1. Name.
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Full Legal Name of Selling Stockholder |
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Full Legal Name of Registered Holder (if
not the same as (a) above) through which Registrable Securities are held: |
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(c) |
Full Legal Name of Natural Control Person
(which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered
by this Questionnaire): |
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2. Address
for Notices to Selling Stockholder:
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3. Broker-Dealer
Status:
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Yes ☐ No ☐ |
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If “yes” to Section 3(a), did you receive your Registrable Securities as compensation for investment banking services to the Company? |
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Yes ☐ No ☐ |
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If “no” to Section 3(b), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement. |
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Are you an affiliate of a broker-dealer? |
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Yes ☐ No ☐ |
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If you are an affiliate of a broker-dealer, do you certify that you purchased the Registrable Securities in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities? |
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If “no” to Section 3(d), the Commission’s staff has
indicated that you should be identified as an underwriter in the Registration Statement. |
4. Beneficial
Ownership of Securities of the Company Owned by the Selling Stockholder.
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Except as set forth below
in this Item 4, the undersigned is not the beneficial or registered owner of any securities of the Company other than the securities
issuable pursuant to the Purchase Agreement. |
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(a) |
Type and Amount of other securities beneficially
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5. Relationships
with the Company:
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Except as set forth below,
neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the equity
securities of the undersigned) has held any position or office or has had any other material relationship with the Company (or its
predecessors or affiliates) during the past three years. |
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State any exceptions here: |
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The
undersigned agrees to promptly notify the Company of any material inaccuracies or changes in the information provided herein that may
occur subsequent to the date hereof at any time while the Registration Statement remains effective; provided, that the undersigned shall
not be required to notify the Company of any changes to the number of securities held or owned by the undersigned or its affiliates.
By
signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 5 and
the inclusion of such information in the Registration Statement and the related prospectus and any amendments or supplements thereto.
The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment
of the Registration Statement and the related prospectus and any amendments or supplements thereto.
IN
WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either
in person or by its duly authorized agent.
Date: |
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Owner: |
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PLEASE
EMAIL A .PDF COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE TO , WITH A COPY TO RCARMEL@SRFC.LAW.
Exhibit 10.4
June 18, 2024
PERSONAL AND CONFIDENTIAL
Mr. Gregory Moran, Chief Executive Officer
Zoomcar Holdings, Inc.
Anjaneya Techno Park, No.147, 1st Floor
Kodihalli, Bangalore, India 560008
| Re: | ZCAR | Placement Agent Agreement |
Dear Mr. Moran:
The purpose of this placement
agent agreement is to outline our agreement pursuant to which Aegis Capital Corp. (“Aegis”) will act as the
placement agent on a “best efforts” basis in connection with the proposed private placement (the “Placement”)
by Zoomcar Holdings, Inc. (collectively, with its subsidiaries and affiliates, the “Company”) of promissory
notes (“Notes”) and warrants (“Investor Warrants” and together with the Notes, “Securities”)
to purchase its shares of Common Stock. This placement agent agreement sets forth certain conditions and assumptions upon which the Placement
is premised. The Company expressly acknowledges and agrees that Aegis’s obligations hereunder are on a reasonable “best efforts”
basis only and that the execution of this Agreement does not constitute a commitment by Aegis to purchase the Securities and does not
ensure the successful placement of the Securities or any portion thereof or the success of Aegis with respect to securing any other financing
on behalf of the Company. The Company confirms that entry into this placement agent agreement and completion of the Placement with Aegis
will not breach or otherwise violate the Company’s obligations to any other party or require any payments to such other party. For
the sake of clarity, such obligations may include but not be limited to obligations under an engagement letter, placement agency agreement,
underwriting agreement, advisory agreement, right of first refusal, tail fee obligation or other agreement.
The terms of our agreement
are as follows:
| 1. | Engagement. The Company hereby engages Aegis, for the period beginning on the date hereof
and ending ten (10) days thereafter or upon the completion of the Placement, whichever is sooner (the “Engagement Period”),
to act as the Company’s exclusive investment bank in connection with the proposed Placement. During the Engagement Period or until
the consummation of the Placement, and as long as Aegis is proceeding in good faith with preparations for the Placement, the Company agrees
not to solicit, negotiate with or enter into any agreement with any other source of financing (whether equity, debt or otherwise), any
underwriter, potential underwriter, placement agent, financial advisor, investment banking firm or any other person or entity in connection
with an offering of the Company’s debt or equity securities or any other financing by the Company. Aegis will use its reasonable
“best efforts” to solicit offers to purchase the Securities from the Company on the terms, and subject to
the conditions, set forth in the Prospectus (as defined below). Aegis shall use commercially reasonable efforts to assist the Company
in obtaining performance by each Purchaser (as defined below) whose offer to purchase Securities has been solicited by Aegis, but Aegis
shall not, except as otherwise provided in this Agreement, be obligated to disclose the identity of any potential purchaser or have any
liability to the Company in the event any such purchase is not consummated for any reason. The Company acknowledges that under no circumstances
will Aegis be obligated to underwrite or purchase any Securities for its own account and, in soliciting purchases of the Securities, Aegis
shall act solely as an agent of the Company. The services provided pursuant to this placement agent agreement shall be on an “agency”
basis and not on a “principal” basis. |
| 2. | The Placement. The Placement is expected to consist of a sale of approximately $3.0 million
of the Company’s Securities. Aegis will act as placement agent for the Placement subject to, among other matters referred to herein
and additional customary conditions, completion of Aegis’s due diligence examination of the Company and its affiliates, listing
approval by the Nasdaq Capital Market (“Exchange”) of the Securities to be issued, and the execution of a definitive
Securities Purchase Agreement in connection with the Placement (the “Securities Purchase Agreement”). The actual
size of the Placement, the precise number of Securities to be offered by the Company and the offering price will be the subject of continuing
negotiations between the Company and the investors thereto. In connection with the entry into the Securities Purchase Agreement, the Company
(i) will meet with Aegis and its representatives to discuss such due diligence matters and to provide such documents as Aegis may require;
(ii) will not file with the Commission any document regarding the Placement without the prior approval of Aegis and its counsel; (iii)
will deliver to Aegis and the investors in the Placement such legal and accounting opinions and letters (including, without limitation,
accounting comfort letters, legal opinions, negative assurance letters, good standing certificates and officers’ and secretary certificates)
as Aegis may require, all in form and substance acceptable to Aegis and (iv) will ensure that Aegis is a third party beneficiary of all
representations, warranties, covenants, closing conditions and deliverables in connection with the Placement. |
| 3. | Placement Compensation. The placement commission will be 10% of gross proceeds from the
Placement and a non-accountable expense allowance equal to 3% of gross proceeds from the Placement. Aegis shall also be entitled to a
warrant solicitation fee of 5% of the amount of any gross proceeds from Investor Warrant exercises. As additional compensation for Aegis’s
services, the Company shall issue to Aegis or its designees warrants (the “Placement Agent Warrants”) to purchase
that number of shares of common stock equal to 10% of amount of the Placement in the form attached hereto as Exhibit A. The Placement
Agent Warrants shall have the same terms as the Investor Warrants. |
| 4. | Registration Statement. To the extent the Company decides to proceed with the Placement,
the Company will, as soon as practicable and in no event later than the times set forth in the registration rights agreement to be entered
into with the investors in the Placement (“Registration Rights Agreement”), prepare and file with the Securities
and Exchange Commission (the “Commission”)
a Registration Statement on Form S-1 (the “Registration Statement”) under the Securities Act of 1933, as amended
(the “Securities Act”) and a prospectus and prospectus supplement included therein (together, the “Prospectus”)
covering the sale and resale of the shares underlying the Investor Warrants and Placement Agent Warrants (collectively, the “Unregistered
Securities”) to be offered and sold in the Placement. The Registration Statement (including the Prospectus therein), and
all amendments and supplements thereto, will be in form reasonably satisfactory to the investors, Aegis and counsel to the investors and
Aegis. Other than any information provided by the investors or Aegis in writing specifically for inclusion in the Registration Statement
or the Prospectus, the Company will be solely responsible for the contents of its Registration Statement and Prospectus and any and all
other written or oral communications provided by or on behalf of the Company to any actual or prospective investor of the Securities,
and the Company represents and warrants that such materials and such other communications will not, as of the date of the offer or sale
of the Unregistered Securities, contain any untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
If at any time prior to the completion of the offer and sale of the Unregistered Securities an event occurs that would cause the Registration
Statement or Prospectus (as supplemented or amended) to contain an untrue statement of a material fact or to omit to state a material
fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, the
Company will notify Aegis immediately of such event and Aegis will suspend solicitations of the prospective purchasers of the Unregistered
Securities until such time as the Company shall prepare a supplement or amendment to the Registration Statement or Prospectus that corrects
such statement or omission. |
| 5. | Lock-Ups. In connection with the Placement, the Company’s directors, executive officers,
employees and shareholders holding at least five percent (5%) of the outstanding common stock will enter into customary “lock-up”
agreements in favor of the Placement Agent for a period of ninety (90) days after the later of the Closing of the Placement or effectiveness
of the Registration Statement (the “Lock-Up Period”); provided, however, that any sales by parties to the lock-ups
shall be subject to the lock-up agreements and provided further, that none of such common stock shall be saleable in the public market
until the expiration of the Lock-Up Period. |
| 6. | Expenses. The Company will be responsible for and will pay all expenses relating to the
Placement, including, without limitation, (a) all filing fees and expenses relating to the registration of the Securities with the Commission;
(b) all FINRA Public Offering filing fees; (c) all fees and expenses relating to the listing of the Company’s equity or equity-linked
securities on an Exchange; (d) all fees, expenses and disbursements relating to the registration or qualification of the Securities under
the “blue sky” securities laws of such states and other jurisdictions as Aegis may reasonably designate (including, without
limitation, all filing and registration fees, and the reasonable fees and disbursements of the Company’s “blue sky”
counsel, which will be Aegis’s counsel) unless such filings are not required in connection with the Company’s proposed Exchange
listing; (e) any fees for counsel to lead investors in the Placement;
(f) all fees, expenses and disbursements relating to the registration, qualification or exemption of the Securities under the securities
laws of such foreign jurisdictions as Aegis may reasonably designate; (g) the costs of all mailing and printing of the Placement documents;
(h) transfer and/or stamp taxes, if any, payable upon the transfer of Securities from the Company to Aegis; (i) the fees and expenses
of the Company’s accountants; and (j) $85,000 for reasonable legal fees and disbursements for Aegis’s counsel. |
| 7. | Right First Refusal. If, for the period beginning on the closing date of the Placement and
ending eighteen (18) months after the closing date of the Placement, the Company or any of its subsidiaries (a) decides to finance or
refinance any indebtedness, Aegis (or any affiliate designated by Aegis) shall have the right to act as sole book-runner, sole manager,
sole placement agent or sole agent with respect to such financing or refinancing; or (b) decides to raise funds by means of a public offering
(including at-the-market facility) or a private placement or any other capital raising financing of equity, equity-linked or debt securities,
Aegis (or any affiliate designated by Aegis) shall have the right to act as sole book-running manager, sole underwriter or sole placement
agent for such financing. Notwithstanding the foregoing sentence, the Company shall be permitted to file with the Commission at any time
a Shelf Registration Statement so long as any financing made pursuant to such Shelf Registration Statement complies with the other requirements
of the foregoing sentence. If Aegis or one of its affiliates decides to accept any such engagement, the agreement governing such engagement
(each, a “Subsequent Transaction Agreement”) will contain, among other things, provisions for customary fees
for transactions of similar size and nature, but in no event will the fees be less than those outlined herein, and the provisions of this
Agreement, including indemnification, which are appropriate to such a transaction. Notwithstanding the foregoing, the decision to accept
the Company’s engagement under this Section 7 shall be made by Aegis or one of its affiliates,
by a written notice to the Company, within ten (10) days of the receipt of the Company’s notification of its financing needs, including
a detailed term sheet. Aegis’s determination of whether in any case to exercise its right of first refusal will be strictly limited
to the terms on such term sheet, and any waiver of such right of first refusal shall apply only to such specific terms. If Aegis waives
its right of first refusal, any deviation from such terms (including without limitation after the launch of a subsequent transaction)
shall void the waiver and require the Company to seek a new waiver from the right of first refusal on the terms set forth in this Section
7. |
| 8. | Tail Financing. Aegis shall be entitled to compensation under Section 3
herein, calculated in the manner set forth therein, with respect to any public or private offering or other financing or capital raising
transaction of any kind (“Tail Financing”) to the extent that such financing or capital is provided to the Company
by investors Aegis has introduced to and/or contacted on behalf of the Company through an in-person, electronic or telephonic communication
or investors that Aegis had “wall-crossed” in connection with this Placement (or any entity under common management or having
a common investment advisor), if such Tail Financing is consummated at any time within eighteen (18) months after the Closing, expiration
or termination of this placement agent agreement. |
| 9. | Closing; Closing Deliverables. Unless otherwise directed by the Placement Agent, on the
Closing Date, the Company shall deliver the Securities to the purchasers thereof and the purchasers shall send payment to escrow for the
purchase price; upon receipt of such Securities, the Placement Agent shall cause the escrow agent to deliver the purchase price by wire
transfer to the Company. |
9.1. Company Deliveries.
| 9.1.1. | On the date hereof, the Company shall deliver each of the following: |
9.1.1.1
This Agreement duly executed by the Company.
9.1.1.2
Securities purchase agreement(s) duly executed by the Company.
9.1.1.3
A CFO certificate from the Company’s chief financial officer addressed to the Placement Agent in form and substance reasonably
satisfactory in all material respects.
9.1.1.4
A certificate executed by the Chief Financial Officer of the Company in customary form reasonably satisfactory to the Placement
Agent and its counsel.
9.1.1.5
The Registration Rights Agreement.
9.1.1.6
The Lock-Up Agreements.
| 9.1.2. | On or prior to the Closing Date, the Company shall deliver each
the following: |
9.1.2.1
A legal opinion of Ellenoff Grossman & Schole LLP, addressed to the Placement Agent and the Purchasers, in form and substance
reasonably acceptable to the Placement Agent and Purchasers.
9.1.2.2
The Company shall have provided each Purchaser with the Company’s wire instructions, on Company letterhead and executed by
the Chief Executive Officer or Chief Financial Officer.
9.1.2.3
A duly executed and delivered Officers’ Certificate, in customary form reasonably satisfactory to the Placement Agent and
its counsel.
9.1.2.4
The Investor Warrants registered in the name of such Purchaser to purchase up to a number of shares of Common Stock stated on such
Purchaser’s signature page hereto.
9.1.2.5
The Placement Agent Warrants.
9.1.2.6
The Notes in the name of such Purchaser in the amount stated on such Purchaser’s signature page hereto.
| 10. | Conditions of the Obligations of the Placement Agent. The obligations of the Placement Agent
hereunder shall be subject to the accuracy of the representations and warranties on the part of the Company set forth in the Securities
Purchase Agreement, in each case as of the date hereof and as of the Closing Date as though then made, to the timely performance by each
of the Company of its covenants and other obligations hereunder on and as of such dates, and to each of the following additional conditions: |
10.1. Closing Deliverables. The Company shall have delivered all closing deliverables to the Placement Agent as set forth in Section 9.1 as of the time required and in form reasonably satisfactory to the Placement Agent.
10.1.1.
No Material Changes. Prior to and on the Closing Date: (i) there shall have been no Material Adverse Effect or development
involving a prospective Material Adverse Effect in the condition or prospects or the business activities, financial or otherwise, of the
Company from the latest dates as of which such condition is set forth in the Registration Statement, the Disclosure Package and the Prospectus;
(ii) no action, suit or proceeding, at law or in equity, shall have been pending or threatened against the Company or any affiliates of
the Company before or by any court or federal or state commission, board or other administrative agency wherein an unfavorable decision,
ruling or finding may materially adversely affect the business, operations, prospects or financial condition or income of the Company,
except as set forth in the Registration Statement and the Prospectus; (iii) no stop order shall have been issued under the Securities
Act and no proceedings therefor shall have been initiated or threatened by the Commission; and (iv) the Registration Statement and the
Prospectus and any amendments or supplements thereto shall contain all material statements which are required to be stated therein in
accordance with the Securities Act and the Securities Act Regulations and shall conform in all material respects to the requirements of
the Securities Act and the Securities Act Regulations, and neither the Registration Statement nor the Prospectus nor any amendment or
supplement thereto shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
10.1.2.
Additional Documents. At the Closing Date, Placement Agent’s counsel shall have been furnished with such documents
and opinions as they may require in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of
any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be satisfactory in form and substance to the Placement Agent and Placement Agent’s counsel.
| 11. | Prior Agreement. By entering into this Agreement, the parties agree that that certain letter
of engagement, dated May 24, 2024, entered into between the same parties hereof, shall automatically terminate and cease to have any effect
whatsoever and shall be superseded in its entirety by this Agreement. |
| 12. | Termination. Notwithstanding anything to the contrary contained herein, the Company agrees
that the provisions relating to the payment of fees, reimbursement of expenses, tail fee, indemnification and contribution,
confidentiality, conflicts, independent contractor and waiver of the right to trial by jury will survive any termination or expiration
of this placement agent agreement. Notwithstanding anything to the contrary contained herein, the Company has the right to terminate the
placement agent agreement for cause in compliance with FINRA Rule 5110(g)(5)(B)(i). The exercise of such right of termination for cause
eliminates the Company’s obligations with respect to the provisions relating to the tail fees. Notwithstanding anything to the contrary
contained in this placement agent agreement, in the event that no Placement is completed for any reason whatsoever during the Engagement
Period, the Company shall be obligated to pay to Aegis its actual and accountable out-of-pocket expenses related to the Placement (including
the fees and disbursements of Placement Agent’s legal counsel) and if applicable, for electronic road show service used in connection
with the Placement. During the engagement hereunder: (i) the Company will not, and will not permit its representatives to, other than
in coordination with Aegis, contact or solicit institutions, corporations or other entities or individuals as potential purchasers of
the Securities and (ii) the Company will not pursue any financing transaction which would be in lieu of the Placement. Furthermore, the
Company agrees that during Aegis’s engagement hereunder, all inquiries from prospective investors will be referred to Aegis. Regardless
of termination and except as stated in this Section 12, Section 7
and Section 8 of this placement agent agreement will still remain in full effect if an offering
is consummated. |
| 13. | Publicity. The Company agrees that it will not issue press releases or engage in any other
publicity, without Aegis’s prior written consent, commencing on the date hereof and continuing until the final Closing of the Placement. |
| 14. | Information. During the Engagement Period or until the Closing, the Company agrees to cooperate
with Aegis and to furnish, or cause to be furnished, to Aegis, any and all information and data concerning the Company, and the Placement
that Aegis deems appropriate (the “Information”). The Company will provide Aegis reasonable access during normal
business hours from and after the date of execution of this placement agent agreement until the Closing to all of the Company’s
assets, properties, books, contracts, commitments and records and to the Company’s officers, directors, employees, appraisers, independent
accountants, legal counsel and other consultants and advisors. Except as contemplated by the terms hereof or as required by applicable
law, Aegis will keep strictly confidential all non-public Information concerning the Company provided to Aegis. No obligation of confidentiality
will apply to Information that: (a) is in the public domain as of the date hereof or hereafter enters the public domain without a breach
by Aegis, (b) was known or became known by Aegis prior to the Company’s disclosure thereof to Aegis as demonstrated by the existence
of its written records, (c) becomes known to Aegis from a source other than the Company which information is not provided by the breach
of an obligation of confidentiality owed to the Company, (d) is disclosed by the Company to a third party without restrictions on its
disclosure or (e) is independently developed by Aegis as demonstrated by its written records. For the avoidance of doubt, except as otherwise
provided herein, all information which is not publicly available relating to the Company’s proprietary technology is proprietary
and confidential. |
| 15. | No Third Party Beneficiaries; No Fiduciary Obligations. This placement agent agreement does
not create, and shall not be construed as creating, rights enforceable by any person or entity not a party hereto, except those entitled
hereto by virtue of the indemnification provisions hereof. The Company acknowledges and agrees that: (i) Aegis is not and shall not be
construed as a fiduciary of the Company and shall have no duties or liabilities to the equity holders or the creditors of the Company
or any other person or entity by virtue of this placement agent agreement or the retention of Aegis hereunder, all of which are hereby
expressly waived; and (ii) Aegis is a full service securities firm engaged in a wide range of businesses and from time to time, in the
ordinary course of its business, Aegis or its affiliates may hold long or short positions and trade or otherwise effect transactions for
its own account or the account of its customers in debt or equity securities or loans of the companies which may be the subject of the
transactions contemplated by this placement agent agreement. During the course of Aegis’s engagement with the Company, Aegis may
have in its possession material, non-public information regarding other companies that could potentially be relevant to the Company or
the transactions contemplated herein but which cannot be shared due to an obligation of confidence to such other companies. |
| 16. | Indemnification, Advancement & Contribution. |
16.1. Indemnification.
The Company agrees to indemnify and hold harmless Aegis, its affiliates and each person controlling Aegis (within the meaning of Section
15 of the Securities Act), and the directors, officers, agents and employees of Aegis, its affiliates and each such controlling person
(Aegis, and each such entity or person hereafter is referred to as an “Indemnified Person”) from and against
any losses, claims, damages, judgments, assessments, costs and other liabilities (collectively, the “Liabilities”),
and shall reimburse each Indemnified Person for all fees and expenses (including the reasonable fees and expenses of counsel for the
Indemnified Persons) (collectively, the “Expenses”) and agrees to advance payment of such Expenses as they
are incurred by an Indemnified Person in investigating, preparing, pursuing or defending any actions, whether or not any Indemnified
Person is a party thereto, arising out of or based upon (i) any untrue statement or alleged untrue statement of a material fact contained
in (A) the Registration Statement, Prospectus or any other offering documents (as from time to time each may be amended and supplemented),
(B) any materials or information provided to investors by, or with the approval of, the Company in connection with the marketing of the
Placement, including any “road show” or investor presentations made to investors by the Company (whether in person or electronically),
or (C) any application or other document or written communication (collectively called “application”) executed by the Company
or based upon written information furnished by the Company in any jurisdiction in order to qualify the Securities under the securities
laws thereof or to file for an exemption from such requirement or filed with the Commission, any state securities commission or agency,
any national securities exchange; or (ii) the omission or alleged omission therefrom of a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, unless such
statement or omission was made in reliance upon, and in conformity with, information provided to the Company by Aegis in writing specifically
for use in the Registration Statement, Prospectus or any other offering documents with respect which or resulting from conduct by Aegis
or another Indemnified Party, as to which Aegis shall indemnify and hold harmless the Company, its officers, directors and controlling
parties in the manner set forth in this Section 16. The Company also agrees to reimburse
and advance each Indemnified Person for all Expenses as they are incurred in connection with such Indemnified Person’s enforcement
of his or its rights under this Section 16.
16.2.
Procedure. Upon receipt by an Indemnified Person of actual notice of an action against such Indemnified Person with
respect to which indemnity may reasonably be expected to be sought under this Section 16,
such Indemnified Person shall promptly notify the Company in writing; provided that failure by any Indemnified Person so to notify the
Company shall not relieve the Company from any obligation or liability which the Company may have on account of this Section 16
or otherwise to such Indemnified Person. The Company shall, if requested by Aegis, assume the defense of any such action (including the
employment of counsel designated by Aegis and reasonably satisfactory to the Company). Any Indemnified Person shall have the right to
employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be
at the expense of such Indemnified Person unless: (i) the Company has failed promptly to assume the defense and employ separate counsel
reasonably acceptable to Aegis for the benefit of Aegis and the other Indemnified Persons or (ii) such Indemnified Person shall have been
advised that in the opinion of counsel that there is an actual or potential conflict of interest that prevents (or makes it imprudent
for) the counsel designated by and engaged by the Company for the purpose of representing the Indemnified Person, to represent both such
Indemnified Person and any other person represented or proposed to be represented by such counsel, in which event the Company shall pay
the reasonable fees and expenses of one counsel, plus local counsel, for all Indemnified Parties, which counsel shall, if Aegis is a defendant,
be designated by Aegis. The Company shall not be liable for any settlement of any action effected without its written consent (which shall
not be unreasonably withheld). In addition, the Company shall not, without the prior written consent of Aegis, settle, compromise or consent
to the entry of any judgment in or otherwise seek to terminate any pending or threatened action in respect of which advancement, reimbursement,
indemnification or contribution may be sought hereunder (whether or not such Indemnified Person is a party thereto) unless such settlement,
compromise, consent or termination (i) includes an unconditional release of each Indemnified Person, acceptable to such Indemnified Party,
from all Liabilities arising out of such action for which indemnification or contribution may be sought hereunder and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any Indemnified Person. The advancement,
reimbursement, indemnification and contribution obligations of the Company required hereby shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as every Liability and Expense is incurred and is due and payable, and in such
amounts as fully satisfy each and every Liability and Expense as it is incurred (and in no event later than 30 days following the date
of any invoice therefore).
16.3.
Contribution. In the event that a court of competent jurisdiction makes a finding, final beyond right of review,
that indemnity is unavailable to an Indemnified Person, the Company shall contribute to the Liabilities and Expenses paid or payable
by such Indemnified Person in such proportion as is appropriate to reflect (i) the relative benefits to the Company, on the one hand,
and to Aegis and any other Indemnified Person, on the other hand, of the matters contemplated by this Section 16
or (ii) if the allocation provided by the immediately preceding clause is not permitted by applicable law, not only such relative benefits
but also the relative fault of the Company, on the one hand, and Aegis and any other Indemnified Person, on the other hand, in connection
with the matters as to which such Liabilities or Expenses relate, as well as any other relevant equitable considerations; provided that
in no event shall the Company contribute less than the amount necessary to ensure that all Indemnified Persons, in the aggregate, are
not liable for any Liabilities and Expenses in excess of the amount of commissions and non-accountable expense allowance actually received
by Aegis in the Placement. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the
Company on the one hand or Aegis on the other and the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company and Aegis agree that it would not be just and equitable if contributions
pursuant to this subsection 16.3 were determined by pro rata allocation or by any other method
of allocation which does not take account of the equitable considerations referred to above in this subsection 16.3.
For purposes of this paragraph, the relative benefits to the Company, on the one hand, and to Aegis on the other hand, of the matters
contemplated by this Section 16 shall be deemed to be in the same proportion as: (a) the
total value received by the Company in the Placement, whether or not such Placement is consummated, bears to (b) the commissions paid
to Aegis under the Placement Agent Agreement. Notwithstanding the above, no person guilty of fraudulent misrepresentation within the
meaning of Section 11(f) of the Securities Act shall be entitled to contribution from a party who was not guilty of fraudulent misrepresentation.
16.4.
Limitation. The Company also agrees that no Indemnified Person shall have any liability (whether direct or indirect,
in contract or tort or otherwise) to the Company for or in connection with advice or services rendered or to be rendered by any Indemnified
Person pursuant to this placement agent agreement, the transactions contemplated thereby or any Indemnified Person’s actions or
inactions in connection with any such advice, services or transactions, except to the extent that a court of competent jurisdiction has
made a finding that Liabilities (and related Expenses) of the Company have resulted exclusively from such Indemnified Person’s
gross negligence or willful misconduct in connection with any such advice, actions, inactions or services.
| 17. | Equitable Remedies. Each party to this placement agent agreement acknowledges and agrees
that (a) a breach or threatened breach by the Company of any of its obligations under Section 7
or the exclusivity provisions of Section 1 would give rise to irreparable harm to Aegis for
which monetary damages would not be an adequate remedy and (b) if a breach or a threatened breach by the Company of any such obligations
occurs, Aegis will, in addition to any and all other rights and remedies that may be available to such party at law, at equity, or otherwise
in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction, specific performance
of the terms of Section 7 or the exclusivity provisions of Section
1, as applicable, and any other relief that may be available from a court of competent jurisdiction,
without any requirement to (i) post a bond or other security, or (ii) prove actual damages or that monetary damages will not afford an
adequate remedy. Each party to this placement agent agreement agrees that such party shall not oppose or otherwise challenge the existence
of irreparable harm, the appropriateness of equitable relief or the entry by a court of competent jurisdiction of an order granting equitable
relief, in either case, consistent with the terms of this Section 17. |
| 18. | Governing Law; Venue. This placement agent agreement will be deemed to have been made and
delivered in the State of New York, USA, and both the provisions of this placement agent agreement and the transactions contemplated hereby
will be governed as to validity, interpretation, construction, effect and in all other respects by the internal laws of the State of New
York, without regard to the conflict of laws principles thereof. Each of Aegis and the Company: (i) agrees that any legal suit, action
or proceeding arising out of or relating to this placement agent agreement and/or the transactions contemplated hereby will be instituted
exclusively in the courts located in the Borough of Manhattan, City of New York, County of New York, State of New York (ii) waives any
objection which it may have or hereafter to the venue of any such suit, action or proceeding, and (iii) irrevocably consents to the jurisdiction
of the courts located in the City of New York, County of New York and State of New York, in any such suit, action or proceeding. Each
of Aegis and the Company further agrees to accept and acknowledge service of any and all process which may be served in any such suit,
action or proceeding in such courts and agrees that service of process upon the Company mailed by certified mail to the Company’s
address will be deemed in every respect effective service of process upon the Company, in any such suit, action or proceeding, and service
of process upon Aegis mailed by certified mail to Aegis’s address will be deemed in every respect effective service process upon
Aegis, in any such suit, action or proceeding. Notwithstanding any provision of this placement agent agreement to the contrary, the Company
agrees that neither Aegis nor its affiliates, and the respective officers, directors, employees, agents and representatives of Aegis,
its affiliates and each other person, if any, controlling Aegis or any of its affiliates, will have any liability (whether direct or indirect,
in contract or tort or otherwise) to the Company for or in connection with the engagement and transaction described herein except for
any such liability for losses, claims, damages or liabilities incurred by the Company that are finally judicially determined to have resulted
from the bad faith or gross negligence of such individuals or entities. Aegis will act under this placement agent agreement as an independent
contractor with duties to the Company. |
| 19. | Miscellaneous. The Company represents and warrants that it has all required power and authority
to enter into and carry out the terms and provisions of this placement agent agreement and the execution, delivery and performance of
this placement agent agreement does not breach or conflict with any agreement, document or instrument to which it is a party or bound.
This placement agent agreement is legally binding upon and inures to the benefit of both the Company and Aegis and their respective assigns,
successors, and legal representatives. If any provision of this placement agent agreement is determined to be invalid or unenforceable
in any respect, such determination will not affect such provision in any other respect, and the remainder of the placement agent agreement
shall remain in full force and effect. This placement
agent agreement may be executed in counterparts (including electronic counterparts), each of which shall be deemed an original but all
of which together shall constitute one and the same instrument. The undersigned hereby consents to receipt of this placement agent agreement
in electronic form and understands and agrees that this placement agent agreement may be signed electronically. Signatures to this placement
agent agreement transmitted in electronic form will have the same effect as physical delivery of a paper document bearing the original
signature, and if any signature is delivered electronically evidencing an intent to sign this placement agent agreement, such electronic
mail or other electronic transmission shall create a valid and binding obligation of the undersigned with the same force and effect as
if such signature were an original. Execution and delivery of this placement agent agreement by electronic mail or other electronic transmission
is legal, valid and binding for all purposes. |
If you are in agreement with
the foregoing, please sign and return to us one copy of this placement agent agreement. This placement agent agreement may be executed
in counterparts (including facsimile or .pdf counterparts), each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
[Signature Page of ZCAR Placement Agent Agreement
Follows]
[Signature Page of ZCAR Placement Agent Agreement]
|
Very truly yours, |
|
|
|
Aegis Capital Corp. |
|
|
|
|
By: |
|
|
Name: |
Robert Eide |
|
Title: |
Chief Executive Officer |
AGREED AND ACCEPTED:
The foregoing accurately sets forth our understanding
and agreement with respect to the matters set forth herein.
Zoomcar Holdings, Inc. |
|
|
|
|
By: |
|
|
Name: |
Gregory Moran |
|
Title: |
Chief Executive Officer |
|
11
v3.24.1.1.u2
Cover
|
Jun. 18, 2024 |
Document Type |
8-K
|
Amendment Flag |
false
|
Document Period End Date |
Jun. 18, 2024
|
Entity File Number |
001-40964
|
Entity Registrant Name |
ZOOMCAR
HOLDINGS, INC.
|
Entity Central Index Key |
0001854275
|
Entity Tax Identification Number |
99-0431609
|
Entity Incorporation, State or Country Code |
DE
|
Entity Address, Address Line One |
Anjaneya
Techno Park
|
Entity Address, Address Line Two |
No.147
|
Entity Address, Address Line Three |
1st Floor
|
Entity Address, City or Town |
Bangalore
|
Entity Address, Country |
IN
|
Entity Address, Postal Zip Code |
560008
|
City Area Code |
+91
|
Local Phone Number |
99454-8382
|
Written Communications |
false
|
Soliciting Material |
false
|
Pre-commencement Tender Offer |
false
|
Pre-commencement Issuer Tender Offer |
false
|
Entity Emerging Growth Company |
true
|
Elected Not To Use the Extended Transition Period |
false
|
Common Stock, par value $0.0001 per share |
|
Title of 12(b) Security |
Common
Stock, par value $0.0001 per share
|
Trading Symbol |
ZCAR
|
Security Exchange Name |
NASDAQ
|
Warrants, each exercisable for one share of Common Stock at a price of $5.71, subject to adjustment |
|
Title of 12(b) Security |
Warrants,
each exercisable for one share of Common Stock at a price of $5.71, subject to adjustment
|
Trading Symbol |
ZCARW
|
Security Exchange Name |
NASDAQ
|
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