BOXL 8-K
Boxlight Corp (BOXL)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 1.01 Entry into a Material Definitive Agreement
On August 5, 2026, Boxlight Corporation, a Nevada corporation (the “Company”), entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with the purchasers identified on the signature pages thereto (collectively, the “Purchasers”), pursuant to which the Company agreed to sell to the Purchasers an aggregate of 937,500 shares of the Company’s newly designated Series D Convertible Preferred Stock, par value $0.0001 per share (the “Preferred Stock”), at a purchase price of $8.00 per share, each share having a stated value of $10.00, reflecting a 20% original issue discount (“OID”). The Preferred Stock is convertible into shares of the Company’s Class A Common Stock, par value $0.0001 per share (the “Common Stock”), in accordance with the terms of the Certificate of Designation (as defined below).
In connection with the foregoing, the Company entered into the following transaction documents, each of which is summarized below:
Securities Purchase Agreement
The Securities Purchase Agreement, dated August 5, 2026, is by and among the Company and the Purchasers, pursuant to which the Company agreed to issue and sell 937,500 shares of Preferred Stock in two tranches: Tranche One, in the amount of $5,500,000 (687,500 shares of Preferred Stock), payable on or before the Closing Date; and Tranche Two, in the amount of $2,000,000 (the “Effectiveness Tranche Amount”) (250,000 shares of Preferred Stock), payable upon effectiveness of the resale registration statement, subject to a 60-calendar-day outside date and to (a) the Company’s obtaining the Required Stockholder Approvals (to permit conversion in excess of 19.99% of outstanding Common Stock, increase authorized Class A Common Stock, authorize a reverse stock split of up to 500:1, and obtain the stockholder approval required under the Company’s outstanding warrant agreement, dated as of December 31, 2021, with WhiteHawk Finance LLC, for the sale or issuance of Class A Common Stock at a price per share below the exercise price then in effect thereunder) and (b) the Company remaining current in its SEC reporting obligations.
The Securities Purchase Agreement contains customary representations and warranties, a most-favored-nation provision with respect to subsequent more-favorable financings, and transfer restrictions on the securities. Net proceeds must be used for general corporate purposes and working capital, and may not be used to repay indebtedness, redeem equity securities, settle litigation, or be used in violation of applicable anti-corruption or economic sanctions laws. The Securities Purchase Agreement is governed by Nevada law and provides for arbitration administered by RapidRuling in New York, New York, with each party waiving its right to a jury trial.
Certificate of Designation for Series D Convertible Preferred Stock
In connection with the closing of the transaction, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of Series D Convertible Preferred Stock (the “Certificate of Designation”) with the Secretary of State of the State of Nevada pursuant to NRS 78.1955, establishing up to 937,500 shares of Series D Convertible Preferred Stock. The material terms of the Preferred Stock, as set forth in the Certificate of Designation, include the following:
| ● | Stated Value and Purchase Price. The Preferred Stock has a stated value and liquidation value of $10.00 per share and was issued at a purchase price of $8.00 per share, reflecting a 20% original issue discount. |
| ● | Ranking. The Preferred Stock ranks senior to the Company’s Class A Common Stock and Class B Common Stock with respect to liquidation distributions. |
| ● | Dividends. The Preferred Stock does not accrue dividends in the ordinary course. Upon the occurrence of a “Dividend Trigger Event” (which includes an Event of Default or the Class A Common Stock trading below the applicable floor price for five consecutive trading days), a cumulative “Default Dividend” at a rate of 20% per annum accrues on the stated value of the outstanding Preferred Stock, payable monthly solely in kind, by adding the accrued amount to, and thereby increasing, the stated value of the Preferred Stock. |
| ● | Liquidation Preference. Upon a liquidation, dissolution, or winding up of the Company, holders of the Preferred Stock are entitled to receive, prior to any distribution to holders of junior securities, an amount equal to the aggregate stated value of the outstanding Preferred Stock ($10.00 per share). |
| ● | Voting. The Preferred Stock is non-voting, except with respect to amendments that would adversely affect the rights of holders of the Series D Preferred Stock. |
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| ● | Conversion. The Preferred Stock is convertible at any time after the Initial Issuance Date into shares of Common Stock at a conversion price determined in accordance with the Certificate of Designation, generally based on a discount to recent market prices and subject to an applicable floor price and other limitations set forth therein. |
| ● | Beneficial Ownership Limitation. Conversions are subject to a 4.99% beneficial ownership limitation. |
| ● | Exchange Cap. Absent the Required Stockholder Approvals, conversions are subject to an exchange cap of 19.99% of the outstanding shares of Common Stock as of the Closing Date, in accordance with Nasdaq Listing Rule 5635(d). If conversion shares would equal or exceed 20% of the outstanding Common Stock, the Company must call a special stockholder meeting within 20 days of the Initial Issuance Date (and every 20 days thereafter until approval is obtained) to approve the transactions contemplated by the Securities Purchase Agreement, including the issuance of shares in excess of the Exchange Cap, a reverse stock split of up to 500:1, and an increase in authorized shares. |
| ● | Share Reserve. The Company is required to maintain a share reserve with its transfer agent equal to not less than 300% of the shares of Common Stock issuable upon full conversion of the outstanding Preferred Stock at the applicable floor price. |
| ● | Events of Default. Events of default under the Certificate of Designation include, among other things, delivery failures, missed dividend payments, delisting or trading suspension (for one trading day), failure to remain current in SEC filings, failure to maintain the share reserve or DTC eligibility, loss of an effective resale registration statement, and bankruptcy (with a 30-day cure period for involuntary proceedings). Upon the occurrence of an Event of Default, the stated value of the Preferred Stock automatically increases by a 20% “Default Premium.” |
| ● | Protective Provisions. The Certificate of Designation requires the approval of holders of a majority of the outstanding Series D Preferred Stock for amendments adverse to the rights of the Series D, issuance of additional Series D shares, or Variable Rate Transactions (other than the Equity Purchase Agreement described below). |
Registration Rights Agreement
In connection with the Securities Purchase Agreement, the Company and the Purchasers entered into a registration rights agreement, dated August 5, 2026 (the “Registration Rights Agreement”), pursuant to which the Company agreed to file an initial resale registration statement (on Form S-1 or Form S-3, as applicable) covering the “Registrable Securities” (defined as 200% of the shares of Common Stock issuable upon conversion of the Preferred Stock, assuming conversion at the applicable floor price, plus all shares of Common Stock issued or issuable under the Equity Purchase Agreement described below) within 30 calendar days of the Closing Date, and to use its best efforts to have the registration statement declared effective within 60 calendar days of the Closing Date (or such shorter period following SEC staff clearance).
Upon certain registration failures (including untimely filing, failure of the registration statement to become effective, prolonged unavailability of the prospectus, or failure to maintain Rule 144 public information requirements), the Company must pay liquidated damages equal to 5% of the aggregate subscription amount per affected holder, payable at the occurrence of such event and every 30 days thereafter until cured, plus interest at 18% per annum on late payments. The Company bears all registration expenses and has agreed to customary indemnification provisions for both parties. Amendments require the consent of holders of at least 50.1% of the outstanding Registrable Securities. The Registration Rights Agreement is governed by Nevada law, consistent with the Securities Purchase Agreement.
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Equity Purchase Agreement (Equity Line of Credit)
Concurrently with the closing of the transaction, the Company entered into an Equity Purchase Agreement, dated August 5, 2026, with certain investor identified on the signature page thereto (the “Investor”), establishing an equity line facility under which the Company may sell to the Investor up to $15,000,000 (the “Maximum Commitment Amount”) of shares of the Company's Class A Common Stock over a 36-month commitment period. Under the Equity Purchase Agreement, the Company may direct the Investor to purchase shares (“Put Shares”) through “Regular Puts” and “Intraday Puts” at a purchase price equal to 95% of the applicable market price, subject to the Maximum Regular Put Amount (the lesser of 100% of the five-day average daily trading volume, 30% of daily trading volume on the put date, or $500,000 divided by the closing price) and the Maximum Intraday Put Amount (4.99% of the outstanding shares of Class A Common Stock on the date of the applicable Intraday Put Notice), in each case as may be waived by the Investor in its sole discretion.
The Equity Purchase Agreement includes the following material terms and conditions:
| ● | Exchange Cap. The aggregate number of shares of Common Stock issuable under the Equity Purchase Agreement is subject to an exchange cap of 19.99% of the outstanding shares of Common Stock as of the execution date, if and to the extent required under applicable Nasdaq rules and absent applicable stockholder approval. The Company previously received stockholder approval at its prior annual meeting of stockholders with respect to the issuance of shares of Common Stock under the Equity Purchase Agreement in excess of the Exchange Cap. |
| ● | Beneficial Ownership Limitation. The Investor may not acquire shares that would result in the Investor beneficially owning in excess of 4.99% of the outstanding shares of Common Stock (subject to adjustment up to 9.99% upon 61 days’ prior notice by the Investor). |
| ● | Commitment Fee. The Company agreed to pay a commitment fee of $150,000, payable in shares of Common Stock (“Commitment Shares”) (or, at the Investor’s election, in pre-funded warrants exercisable at $0.0001 per share). The commitment fee is fully earned as of the execution date and is issuable at the Closing Date, with a “True-Up” mechanism requiring the issuance of additional shares of Common Stock (“True-Up Commitment Shares”) if the share price declines as of the earlier of Rule 144 eligibility or effectiveness of the resale registration statement. |
| ● | Restrictive Legends; Put Shares. No restrictive legend is required on Put Shares issued under the Equity Purchase Agreement. |
| ● | Standstill. The Company is subject to standstill periods restricting certain issuances around put notices. |
| ● | Termination. The Equity Purchase Agreement terminates automatically at the end of the 36-month commitment period or upon purchase of the full Maximum Commitment Amount. The Investor may terminate upon the occurrence of certain bankruptcy events or a final delisting of the Common Stock. |
| ● | During the term of the Equity Purchase Agreement, the Company may not enter into any other equity line of credit or similar arrangement, or engage in Variable Rate Transactions other than under the Equity Purchase Agreement, without the Investor’s consent. |
Irrevocable Transfer Agent Instructions
The Company delivered irrevocable instructions (the “Transfer Agent Instructions”) to VStock Transfer, LLC, directing it to, among other things: (i) issue the Commitment Shares (as defined below) under the Equity Purchase Agreement at closing; (ii) issue True-Up Commitment Shares (as defined below) upon notice from the Investor; (iii) maintain a share reserve of not less than 300% of the shares of Common Stock issuable upon full conversion of the outstanding Preferred Stock (the “Conversion Shares”) and not less than 100% of the maximum shares issuable as Put Shares and Commitment Shares under the Equity Purchase Agreement (the “ELOC Shares”); (iv) issue securities within one trading day of receipt of an issuance notice, without further Company consent; (v) deliver shares electronically via DWAC where legend-removal conditions are met, or otherwise in certificated/legended form; and (vi) remove restrictive legends upon effectiveness of a registration statement, Rule 144 eligibility, or other exempt transfer, subject to customary opinion-of-counsel requirements.
The Transfer Agent Instructions are irrevocable, constitute an inducement to the Purchasers, provide that the Purchasers are express third-party beneficiaries thereof, and are accompanied by the Company’s agreement to indemnify the Transfer Agent.
Lock-Up Agreements
In connection with the Securities Purchase Agreement, the Company’s directors, executive officers, and certain stockholders identified therein entered into Lock-Up Agreements, dated August 5, 2026 (collectively, the “Lock-Up Agreements”), pursuant to which each such person agreed not to offer, sell, contract to sell, pledge, or otherwise transfer or dispose of shares of Common Stock or other securities convertible into or exercisable for Common Stock beneficially owned by such person, for a period of 180 calendar days following the Closing Date, subject to customary exceptions, including transfers as bona fide gifts, to affiliates or family trusts, by operation of law, pursuant to a Rule 10b5-1 trading plan established after the lock-up period, or in connection with a change of control transaction approved by the Company’s board of directors. The Lock-Up Agreements are governed by Nevada law and provide for arbitration administered by RapidRuling in New York, New York.
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Form of Pre-Funded Warrant
In connection with the Equity Purchase Agreement, the Company also approved a form of Pre-Funded Warrant to purchase shares of Common Stock (the “Pre-Funded Warrants”), which the Investor may elect to receive in lieu of Commitment Shares (including True-Up Commitment Shares) under the Equity Purchase Agreement. The Pre-Funded Warrants are exercisable at a nominal exercise price of $0.0001 per share, are exercisable at any time until exercised in full (with no fixed expiration date), permit cashless exercise, and are subject to a 4.99% beneficial ownership limitation (which may be increased by the holder up to 9.99% upon 61 calendar days’ prior written notice to the Company). The Pre-Funded Warrants are governed by Nevada law and provide for arbitration administered by RapidRuling in New York, New York.
Placement Agent Agreement
In connection with the Placement, the Company entered into a Placement Agent Agreement, dated August 5, 2026 (the “Placement Agent Agreement”), with RBW Capital Partners LLC and Dawson James Securities, Inc. (collectively, the “Placement Agent”), pursuant to which the Placement Agent agreed to act as the Company’s exclusive placement agent on a “best efforts” basis in connection with the offering of the Preferred Stock. The Placement Agent Agreement does not obligate the Placement Agent to purchase any of the Securities.
As compensation for the Placement Agent’s services, the Company agreed to pay the Placement Agent (i) a cash fee equal to 7.0% of the aggregate gross proceeds received by the Company in the Placement (excluding any gross proceeds received under the Equity Purchase Agreement), and (ii) a cash fee equal to 2.0% of the aggregate gross proceeds received by the Company under the Equity Purchase Agreement as amounts are drawn down thereunder. The Company also agreed to reimburse the Placement Agent for reasonable and accountable out-of-pocket expenses, including the fees and expenses of the Placement Agent’s legal counsel, in an aggregate amount not to exceed $100,000. In addition, the Placement Agent is entitled to compensation with respect to any financing consummated within eighteen (18) months after the closing, expiration, or termination of the Placement Agent Agreement, to the extent such financing is provided by investors introduced by the Placement Agent.
The foregoing descriptions of the Securities Purchase Agreement, Certificate of Designation, Registration Rights Agreement, Transfer Agent Instructions, Equity Purchase Agreement, Lock-Up Agreements, Form of Pre-Funded Warrant, and Placement Agent Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of such agreements, copies of which are filed as exhibits to this Current Report on Form 8-K and incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
The shares of Series D Convertible Preferred Stock (and the shares of Class A Common Stock issuable upon conversion thereof), together with the shares of Class A Common Stock issuable under the Equity Purchase Agreement (including Put Shares and Commitment Shares), were offered and sold in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) thereof and/or Rule 506 of Regulation D promulgated thereunder, to accredited investors, without general solicitation or advertising. The aggregate subscription amount for the Preferred Stock is $7,500,000, representing 937,500 shares at a purchase price of $8.00 per share (aggregate stated value of $9,375,000, reflecting a 20% original issue discount). The Company relied on the Purchasers’ representations, including as to their status as “accredited investors” under Rule 501(a) of Regulation D.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On August 6, 2026, in connection with the closing of the transaction described in Item 1.01 of this Current Report on Form 8-K, the Company filed the Certificate of Designation of Preferences, Rights and Limitations of Series D Convertible Preferred Stock with the Secretary of State of the State of Nevada, which became effective upon filing. The information set forth in Item 1.01 of this Current Report on Form 8-K regarding the Certificate of Designation and the Series D Convertible Preferred Stock is incorporated herein by reference.
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Item 8.01 Other Events.
Based on the foregoing transactions, as of the date of the filing of this Current Report on Form 8-K, the Company believes it has stockholders’ equity in excess of the $2.5 million stockholders’ equity requirement for continued listing on The Nasdaq Capital Market pursuant to Listing Rule 5550(b)(1) (the “Equity Rule’). The Company is awaiting Nasdaq’s formal determination that it has evidenced compliance with the Equity Rule and intends to provide an update upon receipt of such determination.
Item 9.01 Financial Statements and Exhibits.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| BOXLIGHT CORPORATION | ||
| Dated: August 11, 2026 | ||
| By: | /s/ Ryan Zeek | |
| Name: | Ryan Zeek | |
| Title: | Chief Financial Officer | |
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Exhibit 10.1
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this “Agreement”) is dated as of August 5, 2026, between Boxlight Corporation, a Nevada corporation (the “Company”), and each purchaser identified on the signature pages hereto (including their respective successors and assigns, each 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, including 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:
| 1. | Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings set forth in this Section 1: |
1.1. “Acquiring Person” shall have the meaning ascribed to such term in Section 4.5.
1.2. “Action” shall have the meaning ascribed to such term in Section 3.1.10.
1.3. “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.
1.4. “Agreement” shall have the meaning ascribed to such term in the Preamble.
1.5. “BHCA” shall have the meaning ascribed to such term in Section 3.1.43.
1.6. “Board of Directors” means the board of directors of the Company.
1.7. “Business Day” means a Calendar Day other than a Saturday, Sunday or any other Calendar Day which is a federal legal holiday in the United States or any Calendar Day on which the commercial banks in the City of New York are required by law or other governmental action to close, provided that the commercial banks in the City of New York shall not be deemed to be required to be closed due to a “stay at home,” “shelter in place,” “non-essential employee” or 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 generally are open for use by customers on such Calendar Day.
1.8. “Buy-In Price” shall have the meaning ascribed to such term in Section 4.1.4.
1.9. “Calendar Day” means each and every day of the week (Sunday, Monday, Tuesday, Wednesday, Thursday, Friday and Saturday).
1.10. “Certificate of Designation” means the Certificate of Designation of the Series D Convertible Preferred Stock of the Company, to be filed with the Secretary of State of the State of Nevada on or prior to the Closing Date, in the form of Exhibit 1.10.1 attached hereto.
1.11. “Class A Common Stock” means the Class A common stock of the Company, $0.0001 par value per share, and any other class of securities into which such securities may hereafter be reclassified or changed.
1.12. “Closing” means the closing of the purchase and sale of the Securities pursuant to Section 2.1.
1.13. “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.
1.14. “Code” means the Internal Revenue Code of 1986, as amended.
1.15. “Commission” means the United States Securities and Exchange Commission.
1.16. “Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Class A Common Stock, including, without limitation, any debt, preferred shares, 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, Class A Common Stock.
1.17. “Company” shall have the meaning ascribed to such term in the Preamble.
1.18. “Company Counsel” means with respect to U.S. federal securities law and New York law, Lucosky Brookman, 111 Broadway, Suite 807, New York,| New York 10006.
1.19. “Conversion Shares” means all shares of Class A Common Stock issuable upon conversion of the Preferred Stock.
1.20. “Disclosure Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.
1.21. “Disclosure Time” means, (i) if this Agreement is signed on a Calendar 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.
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1.22. “Disqualification Event” shall have the meaning ascribed to such term in Section 3.1.45.
1.23. “ELOC” means the Equity Purchase Agreement, dated as of the date hereof, by and between the Company and [ ] (which shall be the sole Purchaser party to the ELOC), in the form attached hereto as Exhibit 1.23, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.
1.24. “Escrow Agent” means LUCOSKY BROOKMAN LLP.
1.25. “Escrow Agreement” means the escrow agreement to be entered into on or prior to the Closing Date, 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 per the tranche schedule in Section 2.2.
1.26. “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
1.27. “Exempt Issuance” means (i) any conventional bank loans that are not convertible into, or exercisable or exchangeable for, Class A Common Stock or Common Stock Equivalents and do not involve any issuance of any Class A Common Stock or Common Stock Equivalents or other security of the Company in connection therewith; (ii) Class A Common Stock or options issued to employees, officers or directors of the Company pursuant to the Company’s equity incentive plans or pursuant to the compensation agreements previously authorized by the Board of Directors; (iii) securities issued upon the exercise or exchange of or conversion of any Securities issued hereunder or pursuant to any instrument or agreement in effect as of the date hereof; (iv) any issuance of Class A Common Stock pursuant to the ELOC and (v) securities issued pursuant to acquisitions or strategic transactions (whether by merger, consolidation, purchase of equity, purchase of assets, reorganization or otherwise) approved by a majority of the disinterested directors of the Company, 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 during the one hundred and eighty (180) days following the Release Date, and provided that any such issuance shall only be to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic 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.
1.28. “FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.
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1.29. “Federal Reserve” shall have the meaning ascribed to such term in Section 3.1.43.
1.30. “Indebtedness” shall have the meaning ascribed to such term in Section 3.1.29.
1.31. “Intellectual Property Rights” shall have the meaning ascribed to such term in Section 3.1.16.
1.32. “Issuer Covered Person” shall have the meaning ascribed to such term in Section 3.1.45.
1.33. “IT Systems and Data” shall have the meaning ascribed to such term in Section 3.1.48.
1.34. “Legend Removal Date” shall have the meaning ascribed to such term in Section 4.1.3.
1.35. “Liens” means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
1.36. “Lock-Up Agreement” means each Lock-Up Agreement in the form of Exhibit 1.36.1 attached hereto, dated as of the date hereof, by and between the Company and each of the directors, executive officers, and the stockholders identified on Exhibit 1.36.2 attached hereto.
1.37. “Material Adverse Effect” shall have the meaning assigned to such term in Section 3.1.2.
1.38. “Material Permits” shall have the meaning ascribed to such term in Section 3.1.14.
1.39. “Money Laundering Laws” shall have the meaning ascribed to such term in Section 3.1.44.
1.40. “OFAC” shall have the meaning ascribed to such term in Section 3.1.41.
1.41. “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.
1.42. “Placement Agent” means [ ].
1.43. “Placement Agent Agreement” means the placement agent agreement, dated on or about the date hereof, between the Company and the Placement Agent relating to the purchase and sale of the Securities under this Agreement and the purchase and sale of Securities to other accredited investors pursuant to the terms of such Placement Agent Agreement.
1.44. “Preferred Stock” means the shares of the Company’s Series D Convertible Preferred Stock issued to the Purchasers hereunder, having the designations, preferences, rights, powers, restrictions and limitations set forth in the Certificate of Designation.
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1.45. “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, to the knowledge of the Company, threatened.
1.46. “Public Information Failure” shall have the meaning ascribed to such term in Section 4.2.2.
1.47. “Purchaser” shall have the meaning ascribed to such term in the Preamble.
1.48. “Purchaser Party” shall have the meaning ascribed to such term in Section 4.8.
1.49. “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 1.49 attached hereto.
1.50. “Release Date” means the earlier of (i) the Resale Effective Date registering all of the Conversion Shares or (ii) the date that the Conversion Shares can be sold, assigned or transferred without restriction or limitation pursuant to Rule 144 or Rule 144A promulgated under the Securities Act (or a successor rule thereto).
1.51. “Required Approvals” shall have the meaning ascribed to such term in Section 3.1.5.
1.52. “Resale Effective Date” means the earliest of the date that (a) one or more Resale Registration Statements registering for resale all Conversion Shares have been declared effective by the Commission, (b) all of the Conversion 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 the applicable holder of Conversion Shares is not an Affiliate of the Company, or (d) all of the Conversion 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 Conversion Shares pursuant to such exemption which opinion shall be in form and substance reasonably acceptable to such holders.
1.53. “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 Conversion Shares.
1.54. “Rule 144” means Rule 144 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.
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1.55. “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.
1.56. “SEC Reports” shall have the meaning ascribed to such term in Section 3.1.8.
1.57. “Securities” means the Preferred Stock and the Conversion Shares.
1.58. “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
1.59. “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 Class A Common Stock).
1.60. “Stated Value” means, with respect to each share of Preferred Stock, the “Stated Value” of $10.00 set forth in the Certificate of Designation, representing the original purchase price per share multiplied by 1.25 (reflecting a 20% original issue discount).
1.61. “Subscription Amount” means, as to each Purchaser, the aggregate amount to be paid for the Securities 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.
1.62. “Subsidiary” means any subsidiary of the Company as set forth in Schedule 3.1.1 and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.
1.63. “Trading Day” means, as applicable, (x) with respect to all price or trading volume determinations relating to the Class A Common Stock, any day on which the Class A Common Stock is traded on the Trading Market, or, if the Trading Market is not the principal trading market for the Class A Common Stock, then the principal securities exchange or securities market on which the Class A Common Stock is then traded, provided that “Trading Day” shall not include any day on which the Class A Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Class A Common Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00 p.m., New York time) unless such day is otherwise designated as a Trading Day in writing by the Holder or (y) with respect to all determinations other than price determinations relating to the Class A Common Stock, any day on which The Nasdaq Stock Market LLC (or any successor thereto) is open for trading of securities.
1.64. “Trading Market” means any of the following markets or exchanges on which the Class A Common Stock are 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, OTCQX, Pink Open Market (or any successors to any of the foregoing).
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1.65. “Transaction Documents” means this Agreement, the Certificate of Designation, the Registration Rights Agreement, the Escrow Agreement, the Lock-Up Agreements, the ELOC, the Transfer Agent Instruction Letter, and all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.
1.66. “Transfer Agent” means VStock Transfer, LLC, the current transfer agent of the Company, with a mailing address of 18 Lafayette Place, Woodmere, New York 11598, and any successor transfer agent of the Company.
1.67. “Transfer Agent Instruction Letter” means the letter from the Company to the Transfer Agent which instructs the Transfer Agent to issue reserve and/or issue the Securities pursuant to the Transaction Documents.
1.68. “U.S. GAAP” shall have the meaning ascribed to such term in Section 3.1.8.
1.69. “Variable Rate Transaction” means a transaction in which the Company (i) issues or sells any Class A 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 Class A 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 Class A 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 Class A Common Stock (whether or not such payments in share are subject to certain equity conditions), (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, or (iv) issues or sells any equity or debt securities, including without limitation, Class A Common Stock or Common Stock Equivalents, that are subject to or contain any put, call, redemption, buy-back, price-reset or other similar provision or mechanism (including, without limitation, a “Black-Scholes” put or call right, other than in connection with a “fundamental transaction”) that provides for the issuance of additional equity securities of the Company or the payment of cash by the Company; provided that any issuance of Class A Common Stock under the ELOC, the conversion of the Preferred Stock, or the exercise of the Conversion Shares issuable hereunder will not be deemed a Variable Rate Transaction.
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1.70. “VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Class A Common Stock are then listed or quoted on a Trading Market, the daily volume weighted average price of the Class A Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Class A Common Stock are 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 4:00 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Class A Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Class A Common Stock are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Class A Common Stock are then reported on the OTC Pink (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per Class A Common Stock so reported, or (d) in all other cases, the fair market value of the Class A 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 fees and expenses of which shall be paid by the Company.
| 2. | Purchase and Sale. |
2.1. Closing. On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly, agree to purchase, the following Securities: 937,500 shares of Preferred Stock, each having a Stated Value of $10.00 and an aggregate Stated Value of $9,375,000, (representing an aggregate Subscription Amount of $7,500,000 multiplied by 1.25, reflecting a 20% original issue discount). The Subscription Amount shall be payable by the Purchasers in installments in accordance with Section 2.2. At the Closing for the initial Tranche, the Company shall deliver to each Purchaser such Purchaser’s Tranche Percentage of an aggregate of 687,500 shares of Preferred Stock and at the Closing for the second Tranche, the Company shall deliver to each Purchaser such Purchaser’s Tranche Percentage of an aggregate of 250,000 shares of Preferred Stock, having an aggregate Stated Value equal to such Purchaser’s Subscription Amount multiplied by 1.25 (for the avoidance of doubt, reflecting the full Stated Value of such Preferred Stock, notwithstanding that portions of such Purchaser’s Subscription Amount are payable in installments after the Closing Date pursuant to Section 2.2), and the Company and each Purchaser shall deliver the other items set forth in Sections 2.3.1 and 2.3.2 deliverable at the Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.4.1 and 2.4.2, the Closing shall occur remotely by electronic transfer of the Closing documentation or at such location as the parties shall mutually agree.
2.2. Funding of Subscription Amount.
2.2.1. Tranches. Each Purchaser’s Subscription Amount shall be payable in two installments (each, a “Tranche”) as follows. With respect to each Tranche, each Purchaser shall be severally, and not jointly, obligated to fund only an amount equal to such Purchaser’s Tranche Percentage of the aggregate amount of such Tranche. “Tranche Percentage” means, as to each Purchaser, the percentage set forth below such Purchaser’s name on the signature page of this Agreement next to the heading “Tranche Percentage,” which shall equal the quotient (expressed as a percentage) of such Purchaser’s Subscription Amount divided by the aggregate Subscription Amounts of all Purchasers. The Tranches are as follows:
2.2.2. Tranche 1: An aggregate amount for all Purchasers equal to $5,500,000 (the “Initial Tranche Amount”), shall be payable (as to each Purchaser, in an amount equal to such Purchaser’s Tranche Percentage thereof) on or prior to the Closing Date;
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2.2.3. Tranche 2: An aggregate amount for all Purchasers equal to $2,000,000 (the “Effectiveness Tranche Amount”), shall be payable (as to each Purchaser, in an amount equal to such Purchaser’s Tranche Percentage thereof) upon the initial Resale Registration Statement being declared effective by the Commission (the “Effectiveness Date”); provided that no Purchaser shall have any obligation to fund the Effectiveness Tranche Amount unless all of the conditions set forth in Section 2.2.4 and Section 2.4.2 have been and continue to be satisfied as of the Effectiveness Date, and if the Effectiveness Date shall not have occurred on or prior to the date that is sixty (60) Calendar Days following the initial Closing Date, each Purchaser may elect, as to itself, in its sole discretion and without any liability, not to fund such Tranche.
2.2.4. Additional Conditions to Tranche 2: Notwithstanding anything to the contrary in this Agreement, the obligation of each Purchaser to fund the Effectiveness Tranche Amount (Tranche 2) is further subject to the satisfaction (or waiver in writing by such Purchaser) of each of the following, at or prior to the funding of Tranche 2: (i) if and to the extent required under the applicable rules of the Trading Market, the Company shall have obtained such approval of its stockholders (or such other approval) as is necessary to permit the Purchasers to acquire shares of Class A Common Stock upon conversion of the Preferred Stock and pursuant to the ELOC in excess of 19.99% of the Class A Common Stock outstanding as of the Closing Date, (ii) the Company shall have obtained, approval of its stockholders (or such other approval), all corporate power and authority necessary to increase the number of its authorized Class A Common Stock as and when needed to satisfy its obligations under the Transaction Documents, and the Company shall have a sufficient number of authorized shares of Class A Common Stock that are unissued and not otherwise reserved or committed for issuance to satisfy in full the share reservation requirements set forth in Section 4 hereof and to permit the issuance of all shares of Class A Common Stock then issuable pursuant to the ELOC, and shall have delivered to the Purchasers evidence reasonably satisfactory to the Purchasers that any increase in the number of its authorized shares of Class A Common Stock necessary therefor has become effective under Nevada law; (iii)(a) the Company shall have obtained, approval of its stockholders (or such other approval), all corporate power and authority necessary to effect one or more reverse stock splits of its issued and outstanding Class A Common Stock (at a ratio of up to five hundred-to-one (500:1)) as and when determined by the Board of Directors, in each case in accordance with the Company’s articles of incorporation and bylaws and applicable Nevada law; and (iii)(b) the Company shall have obtained, approval of its stockholders (or such other approval as set forth and required under the Warrant Agreement, dated as of December 31, 2021, by and between the Company and WhiteHawk Finance LLC, as amended, for the sale or issuance of Class A Common Stock at a price per share below the exercise price then in effect thereunder (collectively, the “Required Stockholder Approvals”). In addition, as a further condition to the funding of Tranche 2, as of the Effectiveness Date the Company shall be in compliance with, or shall have regained and then be in compliance with, all applicable continued listing requirements of its principal Trading Market (including any minimum stockholders’ equity requirement), or shall have submitted to the Trading Market a plan to regain compliance that the Trading Market has not rejected; provided, that if, as of the Effectiveness Date, the Trading Market shall have rejected such plan and the Company shall not otherwise be in compliance with the applicable continued listing requirements, no Purchaser shall have any obligation to fund Tranche 2. In addition, as a further condition to the funding of Tranche 2, as of the Effectiveness Date the Company shall have filed all reports, schedules, forms, statements and other documents required to be filed by it under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) of the Exchange Act (including the Company’s Quarterly Reports on Form 10-Q, on a timely basis, or shall have received a valid extension of such time of filing and shall have filed any such report prior to the expiration of such extension; provided, that if the Company shall not have done so, no Purchaser shall have any obligation to fund Tranche 2 unless and until the Company shall have become current in all such filings. The Company shall deliver to the Purchasers and the Placement Agent such evidence of the satisfaction of the conditions in this Section 2.2.4 as the Purchasers may reasonably request.
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2.2.5. Each Tranche shall be funded by wire transfer of immediately available funds to the Escrow Agent in accordance with the Escrow Agreement. With respect to Tranche 1, each Purchaser shall deposit its Tranche Percentage of the Initial Tranche Amount with the Escrow Agent on or prior to the Closing Date. The Company shall provide written notice to the Purchasers and the Placement Agent promptly upon the initial filing of the Resale Registration Statement with the Commission (the “Filing Notice”). With respect to Tranche 2, the Company shall provide written notice to the Purchasers and the Placement Agent promptly upon effectiveness of the Resale Registration Statement (an “Effectiveness Notice”), and each Purchaser shall deposit its Tranche Percentage of the Effectiveness Tranche Amount with the Escrow Agent no later than two (2) Business Days after receipt of the Effectiveness Notice. Each Purchaser shall, upon the Company’s reasonable request, deliver to the Company evidence reasonably satisfactory to the Company of such Purchaser’s financial capacity to fund the remaining Tranches (such as a bank or brokerage statement or a proof-of-funds letter). Each Tranche shall be released from escrow to the Company upon the occurrence of the applicable funding trigger event set forth in Section 2.2, and, in the case of Tranche 2, the satisfaction of the additional conditions set forth in Section 2.2.4 above, in accordance with the terms of the Escrow Agreement and upon delivery of joint written instructions to the Escrow Agent by the Purchasers, the Placement Agent and the Company.
2.3. Deliveries.
2.3.1. The Company shall deliver or cause to be delivered to each Purchaser or the Placement Agent, as appropriate, the following at the times stated:
2.3.1.1 on the date hereof:
2.3.1.1.1. this Agreement duly executed by the Company.
2.3.1.1.2. the Placement Agent Agreement, duly executed by the Company.
2.3.1.1.3. a certificate executed by the Chief Financial Officer of the Company in customary form reasonably satisfactory to the Placement Agent.
2.3.1.1.4. the Lock-Up Agreements
2.3.1.1.5. the Registration Rights Agreement duly executed by the Company.
2.3.1.2 on or prior to the Closing Date:
2.3.1.2.1. a legal opinion of Company Counsel, addressed to the Placement Agent and the Purchasers, in form and substance reasonably acceptable to the Placement Agent and the Purchasers.
2.3.1.2.2. a duly executed and delivered Officers’ Certificate, in customary form reasonably satisfactory to the Placement Agent.
2.3.1.2.3. the Escrow Agreement, duly executed by the Company.
2.3.1.2.4. the ELOC, duly executed by the Company.
2.3.1.2.5. issuance to [ ] of the Commitment Shares (as defined in the ELOC) due upon execution.
2.3.1.2.6. evidence reasonably satisfactory to the Placement Agent and the Purchasers of the filing of the Certificate of Designation with respect to the Preferred Stock with the Secretary of State of the State of Nevada.
2.3.1.2.7. a book-entry statement (or certificate) evidencing such Purchaser’s Tranche Percentage of an aggregate of 687,500 shares of Preferred Stock registered in the name of such Purchaser for the initial Tranche and a book-entry statement (or certificate) evidencing such Purchaser’s Tranche Percentage of an aggregate of 250,000 shares of Preferred Stock registered in the name of such Purchaser for the second Tranche.
2.3.1.2.8. the Transfer Agent Instruction Letter duly executed by the Company and Transfer Agent.
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2.3.2. Each Purchaser, and the Placement Agent, as applicable, shall deliver or cause to be delivered to the Company or the Escrow Agent, as applicable, the following at the times stated:
2.3.2.1 on the date hereof:
2.3.2.1.1. this Agreement duly executed by such Purchaser.
2.3.2.1.2. the Registration Rights Agreement duly executed by such Purchaser.
2.3.2.2 on or prior to the Closing Date:
2.3.2.2.1. such Purchaser’s Tranche Percentage of the Initial Tranche Amount by wire transfer to the escrow account specified in writing by the Company or its designee.
2.3.2.2.2. the Escrow Agreement, duly executed by the Placement Agent.
2.3.2.2.3. joint written instructions to the Escrow Agent, duly executed by the Placement Agent.
2.3.2.2.4. the Placement Agent Agreement, duly executed by the Placement Agent.
2.3.2.2.5. the ELOC, duly executed by [ ].
2.4. Closing Conditions.
2.4.1. The respective obligations of the Company hereunder in connection with the Closing and the funding of each Tranche are subject to each of the following conditions being satisfied (or waived in writing by the Company) as of the Closing Date and, with respect to each Tranche funded after the Closing Date, as of the applicable funding date for such Tranche. If any such condition is not satisfied (or so waived) as of the applicable funding date, the Company shall have no obligation to issue and sell the Securities in respect of such Tranche, without any liability to the Company:
2.4.1.1 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 Purchasers contained herein (unless as of a specific date therein in which case they shall be accurate as of such date).
2.4.1.2 all obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been performed.
2.4.1.3 the delivery by each Purchaser of the items set forth in Section 2.3.2 of this Agreement.
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2.4.2. The respective obligations of the Purchasers hereunder in connection with the Closing and the funding of each Tranche are subject to each of the following conditions being satisfied (or waived in writing by such Purchaser) as of the Closing Date and, with respect to each Tranche funded after the Closing Date, as of the applicable funding date for such Tranche. If any such condition is not satisfied (or so waived) as of the applicable funding date, such Purchaser shall have no obligation to fund the Subscription Amount (or the applicable portion thereof) in respect of such Tranche, without any liability to such Purchaser:
2.4.2.1 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, on the Closing Date and, with respect to the funding of any Tranche after the Closing Date, as of the applicable funding 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 as of such date).
2.4.2.2 all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date (and, with respect to the funding of any Tranche after the Closing Date, at or prior to the applicable funding date) shall have been performed.
2.4.2.3 the delivery by the Company of the items set forth in Section 2.3.1 of this Agreement.
2.4.2.4 there shall have been no Material Adverse Effect with respect to the Company since the date hereof.
2.4.2.5 from the date hereof to the Closing Date, trading in the Class A 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.
| 3. | Representations and Warranties. |
3.1. Representations and Warranties of the Company. The Company hereby makes the following representations and warranties to each Purchaser:
3.1.1. Subsidiaries. All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1.1. 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. If the Company has no subsidiaries, all other references to the Subsidiaries or any of them in the Transaction Documents shall be disregarded.
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3.1.2. Organization and Qualification. Each of the Company and its operating 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, could 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”; provided, however, that “Material Adverse Effect” shall not include any event, occurrence, fact, condition or change, directly or indirectly, arising out of or attributable to: (i) the announcement, pendency or completion of the transactions contemplated by the Transaction Documents or (ii) any action required or permitted by the Transaction Documents or any action taken (or omitted to be taken) with the written consent of or at the written request of the Purchasers). As to all Company and Subsidiary power, authority and qualification, 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.
3.1.3. Authorization; Enforcement. 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 legal, 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 (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
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3.1.4. No Conflicts. 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) 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 could not have or reasonably be expected to result in a Material Adverse Effect.
3.1.5. 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 4.4 of this Agreement, (ii) the filing with the Commission of one or more Resale Registration Statements pursuant to the Registration Rights Agreement, (iii) the notice and/or application(s) to each applicable Trading Market for the issuance and sale of the Securities and the listing of the Conversion Shares for trading thereon in the time and manner required thereby, (iv) the filing of Form D with the Commission and such other filings as are required to be made under applicable state securities laws and (v) the Required Stockholder Approvals (collectively, the “Required Approvals”).
3.1.6. 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 (which means that no further sums are required to be paid by the holders thereof in connection with the issue thereof), free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents and applicable law. The Conversion Shares, when issued and paid for in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable (which means that no further sums are required to be paid by the holders thereof in connection with the issue thereof), free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents and applicable law. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of Class A Common Stock for the purpose of enabling the Company to issue the maximum number of Conversion Shares pursuant to any conversion of the Preferred Stock, without regard to any limitations upon conversion of the Preferred Stock and assuming that the Conversion Price (as defined in the Certificate of Designation) is equal to the lowest Floor Price stated therein (as adjusted for forward and reverse stock splits, recapitalizations, stock dividends and the like after the date hereof).
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3.1.7. Capitalization. The capitalization of the Company as of the date hereof is as set forth on Schedule 3.1.7, which Schedule 3.1.7 shall also include the number of Class A Common Stock owned beneficially, and of record, by Affiliates of the Company as of the date hereof. Schedule 3.1.7 shall set forth all Class A Common Stock and Common Stock Equivalents of the Company that are issued and outstanding or issuable (including all Class A Common Stock issued or reserved for, or subject to, issuance upon the conversion, exercise, exchange or settlement of any outstanding Common Stock Equivalents or other rights), and shall be certified as true, correct and complete by the Chief Executive Officer or Chief Financial Officer of the Company. Other than as stated in Schedule 3.1.7, the Company has not issued any capital stock since February 6, 2026, other than pursuant to the exercise of employee stock options under the Company’s stock option plans, the issuance of Class A Common Stock to employees pursuant to the Company’s employee stock purchase 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. 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 in Schedule 3.1.7, or pursuant to this Agreement, 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 Class A 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 Class A Common Stock or Common Stock Equivalents or capital stock of any Subsidiary. The issuance and sale of the Securities will not obligate the Company or any Subsidiary to issue Class A Common Stock or other securities to any Person (other than the Purchasers). Except as set forth in Schedule 3.1.7, 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 in Schedule 3.1.7, 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. 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. 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.
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3.1.8. 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 Company has never been an issuer subject to Rule 144(i) under the Securities Act. 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 (“U.S. GAAP”), except as may be otherwise specified in such financial statements or the notes thereto, 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.
3.1.9. Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest financial statements included within the SEC Reports, (i) there has been no event, occurrence or development that has had or that could 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 U.S. 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 option plans. The Company does not have pending before the Commission any request for confidential treatment of information. 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 at least one (1) Trading Day prior to the date that this representation is made.
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3.1.10. Litigation. To the knowledge of the Company, there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or threatened 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”). Neither the Company nor any Subsidiary, nor, to the knowledge of the Company, any director or officer of the Company or any Subsidiary, 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. There has not been, and to the knowledge of the Company, there is not pending, any investigation by the Commission involving the Company or any current or former director or officer of the Company, except in the ordinary course of business that would not have a Material Adverse Effect. 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.
3.1.11. 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 could 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 could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
3.1.12. Compliance. To the knowledge of the Company, 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 could not have or reasonably be expected to result in a Material Adverse Effect.
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3.1.13. Environmental Laws. To the knowledge of the Company, 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 could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.
3.1.14. 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.
3.1.15. Title to Assets. To the knowledge of the Company, the Company and the Subsidiaries have good and marketable title in fee simple to, or have valid and marketable rights to lease or otherwise use, all real property and all personal property 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 that 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 in accordance with U.S. GAAP, and the payment of which is neither delinquent nor subject to penalties. Neither the Company nor any of its Subsidiaries has received any written notice of any claim of any sort that has been asserted by anyone adverse to the rights of the Company or its Subsidiaries under any of the leases or subleases or licenses or with respect to the properties mentioned above, or affecting or questioning the rights of the Company or any Subsidiary to the continued possession or use of the leased or subleased or licensed premises or the properties mentioned above, other than such claims which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
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3.1.16. Intellectual Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or required for use in connection with their respective businesses as described in the SEC Reports and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). None of, and neither the Company nor any Subsidiary has received notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated or been abandoned. Neither the Company nor any Subsidiary has received, since the date of the latest financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
3.1.17. Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage in amount deemed prudent by the Company. 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.
3.1.18. Transactions with Affiliates and Employees. Except as set forth in the SEC Reports, during the past three fiscal years and the subsequent interim period through the date of this Agreement, 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 option plan of the Company.
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3.1.19. Sarbanes-Oxley; Internal Accounting Controls. The Company is in material compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002, as amended, that are in effect as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are in effect as of the date hereof. The Company maintains 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 U.S. 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. The Company has 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 as of September 30, 2025. Since September 30, 2025, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.
3.1.20. Certain Fees. Except for the fees and expenses of the Placement Agent, no brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person, unless explicitly stated elsewhere in 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 3.1.20 that may be due in connection with the transactions contemplated by the Transaction Documents.
3.1.21. 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.
3.1.22. Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will not itself be, nor will it be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
3.1.23. Registration Rights. Except as disclosed on Schedule 3.1.23 and other than to each of the Purchasers pursuant to the Registration Rights Agreement or pursuant to the ELOC, 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.
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3.1.24. Listing and Maintenance Requirements. The Class A Common Stock are 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 Class A Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration. The Company has not, since its initial public offering, received notice from any Trading Market on which the Class A Common Stock are 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 Company is in compliance with all such listing and maintenance requirements. The Class A Common Stock are 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.
3.1.25. Application of Takeover Protections. 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 jurisdiction 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.
3.1.26. [Reserved].
3.1.27. Disclosure. Except with respect to the terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms that neither it nor, to the Company’s knowledge, 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. 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, is true and correct 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, 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.
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3.1.28. No Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, neither the Company, nor, to the knowledge of the Company, any of its Affiliates, nor, to the knowledge of the Company, 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 the Securities Act which would require the registration of any such securities under the Securities Act, or any applicable stockholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.
3.1.29. 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 exceeds 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 do not 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, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year after the Closing Date. Schedule 3.1.29 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 $50,000 (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 $50,000 due under leases required to be capitalized in accordance with U.S. GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.
3.1.30. Tax Status. The Company and its Subsidiaries each (i) has made or filed (or filed extensions thereof) all material 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 material 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 neither the Company nor any Subsidiary knows of any basis for any such claim.
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3.1.31. No General Solicitation. Neither the Company nor, to the knowledge of the Company, 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.
3.1.32. Foreign Corrupt Practices Act. 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.
3.1.33. Accountants. The Company’s current accounting firm is Cherry Bekaert LLP. To the knowledge and belief of the Company, such accounting firm is a registered public accounting firm as required by the Exchange Act The Company’s accounting firm shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report for the now current fiscal year.
3.1.34. 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 which could affect the Company’s ability to perform any of its obligations under any of the Transaction Documents, 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.
3.1.35. 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.
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3.1.36. Acknowledgment Regarding Purchaser’s Trading Activity. Notwithstanding anything in this Agreement or elsewhere herein to the contrary (except for Sections 3.2.7 and 4.12 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, presently may have a “short” position in the Class A 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 Conversion 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. Notwithstanding the foregoing, to the extent any Purchaser has expressly agreed to restrictions on short sales of the Company’s securities under the ELOC, such Purchaser shall comply with such restrictions in accordance with their terms, and this Section shall be construed accordingly; provided, that such restrictions shall apply only for so long as the ELOC remains in effect, and upon the termination, expiration or exhaustion of the ELOC, such restrictions shall automatically cease to apply and such Purchaser shall thereafter be free to effect short sales of the Company’s securities in accordance with applicable law.
3.1.37. 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 Company’s placement agent in connection with the placement of the Securities.
3.1.38. Officers’ Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to the Purchasers shall be deemed a representation and warranty by the Company to the Purchasers as to the matters covered thereby.
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3.1.39. D&O Questionnaires. To the Company’s knowledge, all information contained in the questionnaires most recently completed by each of the Company’s directors and officers is true and correct in all respects and the Company has not become aware of any information which would cause the information disclosed in such questionnaires become inaccurate and incorrect.
3.1.40. Share Option Plans. Each stock option granted by the Company under the Company’s stock option plan, if any, was granted (i) in accordance with the terms of the Company’s stock option plan and (ii) with an exercise price at least equal to the fair market value of the Class A Common Stock on the date such stock option would be considered granted under U.S. GAAP and applicable law. No stock option granted under the Company’s stock option 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.
3.1.41. 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”).
3.1.42. 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 Code.
3.1.43. Bank Holding Company Act. Neither the Company nor any of its Subsidiaries 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 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 (25%) 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 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.
3.1.44. 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.
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3.1.45. 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, or any executive officer, other officer of the Company participating in the offering hereunder, or to the Company’s knowledge, 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.
3.1.46. 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.
3.1.47. 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.
3.1.48. Cybersecurity. (i) (a) There has been no security breach or other compromise of or relating to any of the Company’s or any Subsidiary’s information technology and computer systems, networks, hardware, software, data (including the data of its respective customers, employees, suppliers, vendors and any third party data maintained by or on behalf of it), equipment or technology (collectively, “IT Systems and Data”) and (b) the Company and the Subsidiaries have not been notified of, and has no knowledge of any event or condition that would reasonably be expected to result in, any security breach or other compromise to its IT Systems and Data; (ii) the Company and the Subsidiaries are presently in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems and Data and to the protection of such IT Systems and Data from unauthorized use, access, misappropriation or modification, except, in the case of clauses (i) and (ii) herein, as would not, individually or in the aggregate, have a Material Adverse Effect; (iii) the Company and the Subsidiaries have implemented and maintained commercially reasonable safeguards to maintain and protect its material confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and Data; and (iv) the Company and the Subsidiaries have implemented backup and disaster recovery technology consistent with industry standards and practices.
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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):
3.2.1. Organization; Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing under the law 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 legal, valid and 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 and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
3.2.2. Own Account. Such Purchaser understands that the Securities are “restricted securities” as defined in Rule 144 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 shall not limit 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.
3.2.3. 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 converts any shares of Preferred Stock, it will be either: (i) 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 or (ii) a “qualified institutional buyer” as defined in Rule 144A(a)(1) under the Securities Act. Such Purchaser hereby represents that neither such Purchaser nor any of its Rule 506(d) Related Parties (as defined below) is a “bad actor” within the meaning of Rule 506(d) promulgated under the Securities Act. For purposes of this Agreement, “Rule 506(d) Related Party” shall mean a person or entity covered by the “Bad Actor disqualification” provision of Rule 506(d) of the Securities Act.
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3.2.4. 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.
3.2.5. General Solicitation. Such Purchaser is not 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 any other general solicitation or general advertisement.
3.2.6. 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.
3.2.7. 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, or preclude any actions, with respect to locating or borrowing shares in order to effect Short Sales or similar transactions in the future.
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3.2.8. No Intent to Effect a Change of Control. Such Purchaser has no present intent to effect a “change of control” of the Company as such term is interpreted and understood under the rules promulgated pursuant to Section 13(d) of the Exchange Act.
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.
| 4. | Other Agreements of the Parties. |
4.1. Transfer Restrictions.
4.1.1. 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 in connection with a pledge as contemplated in Section 4.1.2, the Company may require the transferor thereof to provide to the Company, at the transferor’s sole costs and expense, 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 the Registration Rights Agreement and shall have the rights and obligations of a Purchaser under this Agreement and the Registration Rights Agreement.
4.1.2. Each Purchaser agrees that certificates or other instruments representing the Securities shall bear, and the Company may maintain stop-transfer instructions with respect to, such legends as are necessary to comply with applicable securities laws, including substantially the following legend:
[NEITHER] THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE] 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 CONVERSION 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 sole cost and 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 pursuant to the Registration Rights Agreement, 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 (as defined in the Registration Rights Agreement) thereunder.
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4.1.3. Certificates evidencing the Conversion Shares shall not contain any legend (including the legend set forth in Section 4.1.2 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 Conversion Shares pursuant to Rule 144 , (iii) if such Conversion Shares are eligible for sale or may be sold under Rule 144 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 a Purchaser if required by the Transfer Agent to effect the removal of the legend hereunder, or if requested by a Purchaser, respectively. If all or any portion of a share of Preferred Stock is converted at a time when there is an effective registration statement to cover the resale of the Conversion Shares, if the Conversion Shares or Conversion Shares may be sold under Rule 144 without volume or manner-of-sale restrictions and the Company is then in compliance with the current public information required under Rule 144 , or if the Conversion Shares may be sold under Rule 144 without volume or manner-of-sale restrictions and without the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such Conversion Shares 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 Conversion Shares shall be issued free of all legends. The Company agrees that following the Resale Effective Date or at such time as such legend is no longer required under this Section 4.1.3, it will, no later than one (1) Trading Day following the delivery by a Purchaser to the Company or the Transfer Agent of a certificate (or book-entry notation) representing Conversion Shares, as the case may be, issued with a restrictive legend (such date, the “Legend Removal Date”), at the Company’s sole cost, deliver or cause to be delivered to such Purchaser a certificate representing such Conversion Shares, as the case may be, 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. The Company agrees that no medallion guarantee (or other type of guarantee or notarization) shall be required to remove a legend from any Conversion Shares, as the case may be. Certificates for Securities subject to legend removal hereunder shall be transmitted by the Transfer Agent to such Purchaser by crediting the account of such Purchaser’s prime broker with the Depository Trust Company System as directed by such Purchaser. In addition to such Purchaser’s other available remedies, the Company shall pay to such Purchaser, in cash, as partial liquidated damages and not as a penalty, five percent (5%) of the total of the value of the Conversion Shares for which the removal of the legend is sought (based on the VWAP of the Class A Common Stock on the date such Conversion Shares are submitted to the Transfer Agent) upon such failure, and an additional five percent (5%) of such value for each full month (prorated for any partial month) that said opinion is not delivered after the Legend Removal Date until such certificate is delivered without a legend.
4.1.4. 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 Conversion Shares (based on the VWAP of the Class A Common Stock on the date such Securities are submitted to the Transfer Agent) delivered for removal of the restrictive legend and subject to Section 4.1.3, $20 per Trading Day (increasing to $35 per Trading Day five (5) Trading Days after the Legend Removal Date) for each Trading Day after the Legend Removal Date until such certificate is delivered without a legend 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) Class A Common Stock to deliver in satisfaction of a sale by such Purchaser of all or any portion of the number of Class A Common Stock, or a sale of a number of Class A Common Stock equal to all or any portion of the number of Class A 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 Class A Common Stock so purchased (including brokerage commissions and other out-of-pocket expenses, if any) (the “Buy-In Price”) over the product of (A) such number of Conversion 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 Class A 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 Conversion Shares (as the case may be) and ending on the date of such delivery and payment under this clause (ii).
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4.1.5. 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 Resale 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. Furnishing of Information; Public Information.
4.2.1. Until no Purchaser owns any Securities and the Preferred Stock have terminated, the Company covenants to maintain the effectiveness of the registration of the Class A Common Stock under Section 12(b) or 12(g) of the Exchange Act and 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.
4.2.2. 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) has ever been an issuer described in Rule 144(i)(1)(i) or becomes such an issuer 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 five percent (5.0%) of the aggregate Subscription Amount of such Purchaser’s Securities on the Calendar Day of a Public Information Failure and on every thirtieth (30th) Calendar Day (prorated for periods totaling less than thirty Calendar 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 Conversion Shares pursuant to Rule 144. The payments to which a Purchaser shall be entitled pursuant to this Section 4.2.2 are referred to herein as “Public Information Failure Payments.” Public Information Failure Payments shall be paid on the earlier of (i) the last Calendar 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. If 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.
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4.3. 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 stockholder approval prior to the closing of such other transaction unless stockholder approval is obtained before the closing of such subsequent transaction.
4.4. 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) promptly furnish to the Commission a Current Report on Form 8-K, including the Transaction Documents as exhibits thereto, with the Commission. 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 or agents (including, without limitation, the Placement Agent). 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 (including, without limitation, the Placement Agent), employees or Affiliates 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) to the extent required by federal securities law in connection with (i) any Resale Registration Statement contemplated by this Agreement or the Registration Rights Agreement and (ii) the filing of final Transaction Documents with the Commission and (b) to the extent such disclosure is required by law or Trading Market regulations, in which such cases the Company shall (x) obtain prior advice of competent counsel that such disclosure is required, (y) provide the Purchasers with prior notice of such disclosure permitted under this Section 4.4 and (z) reasonably cooperate with such Purchasers regarding such disclosure.
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4.5. Stockholder 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.
4.6. 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 4.4, 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, directors, 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, agents, employees or Affiliates, or a duty to the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates not to trade on the basis of, such material, non-public information, provided that such 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, the Company shall simultaneously with the delivery of such notice furnish such notice to the Commission pursuant to a Current Report on Form 8-K. If the Company shall fail to so furnish such notice to the Commission within the time period required above, then, in addition to such Purchaser’s other available remedies, such Purchaser shall be entitled (but not obligated) to publicly disclose such material, non-public information, and from and after such failure no Purchaser shall have any duty of confidentiality, or any duty not to trade in the securities of the Company on the basis of, such material, non-public information, in each case to the Company, any of its Subsidiaries, or any of their respective officers, directors, employees, agents or Affiliates, provided that such Purchaser shall remain subject to applicable law. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.
4.7. Use of Proceeds. The Company shall use the net proceeds from the sale of the Securities hereunder for general corporate purposes (which for the avoidance of doubt may include acquisitions, in the Company’s discretion), including working capital. The Company shall not use such proceeds: (a) for the satisfaction of any portion of the Company’s debt (other than payment of trade payables in the ordinary course of the Company’s business and prior practices), (b) for the redemption of any Class A Common Stock or Common Stock Equivalents, (c) for the settlement of any outstanding litigation or (d) in violation of FCPA or OFAC regulations.
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4.8. Indemnification of each Purchaser. Subject to the provisions of this Section 4.8, the Company will indemnify and hold each Purchaser and its directors, officers, stockholders, 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, stockholders, 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, (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 such Purchaser Party’s material breach of any of the representations, warranties or covenants made by such Purchaser Party in any Transaction Document, which material breach directly gave rise to the claim, for which indemnification is sought, or any conduct by such Purchaser Party which is finally judicially determined to constitute fraud, gross negligence or willful misconduct or (c) in connection with any Resale Registration Statement of the Company providing for the resale by the Purchasers of the Conversion Shares issued and issuable upon conversion of the Preferred Stock, the Company will indemnify each Purchaser Party, 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, as incurred, arising out of or relating to (i) any untrue or alleged untrue statement of a material fact contained in such Resale 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 the light of the circumstances under which they were made) not misleading, except to the extent, but only to the extent, that such untrue statements or omissions are based solely upon information regarding such Purchaser Party furnished in writing to the Company by such Purchaser Party expressly for use therein, or (ii) 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 therewith). 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 for any settlement by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed. 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 4.8 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, however, that if any Purchaser Party is finally judicially determined not to be entitled to indemnification or payment under this Section 4.8, 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.
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4.9. Listing of Class A Common Stock. The Company hereby agrees to use its best efforts to maintain the listing or quotation of the Class A Common Stock on the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list or quote all of the Conversion Shares on such Trading Market and promptly secure the listing of all of the Conversion Shares on such Trading Market. The Company further agrees, if the Company applies to have the Class A Common Stock traded on any other Trading Market, it will then include in such application all of the Conversion Shares, and will take such other action as is necessary to cause all of the Conversion Shares to be listed or quoted on such other Trading Market as promptly as possible. The Company will then take all action reasonably necessary to continue the listing and trading of its Class A Common Stock on a Trading Market and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market. The Company agrees to maintain the eligibility of the Class A 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.
4.10. Subsequent Equity Sales.
4.10.1. From the date hereof and for so long as any Preferred Stock remains outstanding, neither the Company nor any Subsidiary shall (i) issue, enter into any agreement to issue or announce the issuance or proposed issuance of any Class A Common Stock or Common Stock Equivalents, (ii) incur any Indebtedness, (iii) enter into any agreement with respect to any of the foregoing, (iv) engage, retain or enter into any agreement or understanding with any investment bank, placement agent, underwriter, broker-dealer, finder or other funding source with respect to any of the foregoing, or (v) file any registration statement or any amendment or supplement thereto, in each case other than as contemplated pursuant to the Registration Rights Agreement or, solely with respect to securities issued pursuant to any share or option plan duly adopted for such purpose by the Board of Directors or a committee of non-employee directors established for such purpose for services rendered to the Company, on Form S-8.
4.10.2. From the date hereof until such time as no Securities remain outstanding, 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 Class A 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
4.10.3. Notwithstanding the foregoing, this Section 4.10 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction shall be an Exempt Issuance, except for the ELOC.
4.11. Equal Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless the same consideration is also offered to all of the parties to the Transaction Documents. 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.
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4.12. 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 4.4. 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 4.4, such Purchaser will maintain the confidentiality of the existence and terms of this transaction. 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 4.4, (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 4.4 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, agents or Affiliates after the issuance of the initial press release as described in Section 4.4. 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.
4.13. Form D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Securities as required under Regulation D. 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.
4.14. Capital Changes. Until the later of (i) the date that is one hundred and eighty (180) days after the Release Date and (ii) the date on which no Preferred Stock remains outstanding, the Company shall not undertake a reverse or forward stock split or reclassification of the Class A Common Stock without the prior written consent of the Purchasers holding a majority in interest of the then-outstanding shares of Preferred Stock (based on Stated Value); provided, however, that nothing herein will prevent the Company from seeking and obtaining a stock combination required to meet the continued listing standards of the Company’s principal Trading Market. Notwithstanding the foregoing, neither the prior written consent of the Purchasers nor compliance with this Section shall be required in connection with any reverse stock split of the issued and outstanding Class A Common Stock at a ratio of up to five hundred-to-one (500:1) that is authorized as contemplated by this Agreement, provided that any such reverse stock split reduces only the number of issued and outstanding Class A Common Stock and does not reduce the number of authorized Class A Common Stock.
4.15. Acknowledgment of Dilution. The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding Class A 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 Conversion 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.
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4.16. Lock-Up Agreements. The Company shall not amend, modify, waive or terminate any provision of any of the Lock-Up Agreements (and any lock-up agreements contemplated in the Lock-Up Agreements) except to extend the term of the lock-up period and shall enforce the provisions of each Lock-Up Agreement (and any lock-up agreements contemplated in the Lock-Up Agreements) in accordance with its terms. If any party to a Lock-Up Agreement (and any lock-up agreements contemplated in the Lock-Up Agreements) breaches any provision of a Lock-Up Agreement, the Company shall promptly use its best efforts to seek specific performance of the terms of such Lock-Up Agreement (and any lock-up agreements contemplated in the Lock-Up Agreements).
4.17. Registration Rights Agreement. On the date hereof, the Company shall enter into the Registration Rights Agreement and shall not amend, modify, waive or terminate any provision of the Registration Rights Agreement, except pursuant to the terms of the Registration Rights Agreement.
4.18. Most Favored Nation. From the date hereof and for so long as any Preferred Stock is owned by any Purchaser, the Company shall not enter into any agreement for the sale or issuance of its securities (in each case, other than an Exempt Issuance or any issuance or transaction under the ELOC) (including securities convertible into or exercisable for Class A Common Stock or Common Stock Equivalents) to any individual or entity (an “Other Investor”) that provides such Other Investor with rights, terms, or benefits that are more favorable in any material respect than those granted to the Purchasers under this Agreement, without offering the Purchasers such more favorable rights, terms, or benefits. In the event the Company intends to offer such more favorable rights, terms, or benefits to any Other Investor, it shall promptly provide written notice to the Purchasers (the “MFN Notice”), which shall include reasonable detail of such more favorable terms and any related agreements. The Purchasers shall have the right, exercisable by written notice to the Company, to receive the benefit of such more favorable terms, which shall automatically amend this Agreement and any Securities held by the Purchasers to incorporate such more favorable terms. If the Purchasers elects to accept such terms, the Company and the Purchasers agree to execute such documentation as may be reasonably necessary to effectuate the amendment of this Agreement and the Securities, including the physical exchange of securities if required. Notwithstanding the foregoing, this Section shall not apply to any subsequent financing where the proceeds will be used to repay the entire outstanding principal portion of the Preferred Stock.
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4.19. Reservation of Class A Common Stock. As of the date hereof, the Company has reserved and shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of shares of Class A Common Stock for the purpose of enabling the Company to issue the maximum number of Conversion Shares issuable upon conversion in full of all outstanding Preferred Stock (calculated assuming conversion in full of the aggregate Stated Value of, and all accrued and unpaid dividends on, the Preferred Stock at the Floor Price set forth in the Certificate of Designation, and in any event equal to not less than 300% of such number), without regard to any limitations on conversion set forth in the Certificate of Designation. If at any time while the Preferred Stock remains outstanding, the Company does not have a sufficient number of shares of Class A Common Stock available to honor the conversion in full of all outstanding Preferred Stock at the Adjusted Floor Price, the Company shall allocate the available shares of Class A Common Stock on a pro rata basis among all Purchasers converting Preferred Stock, and then company shall promptly increase the authorized shares of Class A Common Stock to issue all Conversion Shares in full.
4.20. Conversion Procedures. The form of Notice of Conversion included in the Certificate of Designation sets forth the totality of the procedures required of the Purchasers in order to convert the Preferred Stock. No additional legal opinion, other information or instructions shall be required of the Purchasers to convert their Preferred Stock. Without limiting the preceding sentences, no ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required in order to convert the Preferred Stock. The Company shall honor conversions of the Preferred Stock and shall deliver Conversion Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents and the Certificate of Designation.
| 5. | 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. 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-Calendar Day processing of any instruction letter delivered by the Company and any conversion 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.
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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 email 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 email at the email address as set forth on the signature pages attached hereto on a Calendar 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. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously furnish such notice to the Commission pursuant to a Current Report on Form 8-K.
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 Purchasers that hold a majority in interest of the then-outstanding shares of Preferred Stock (based on Stated Value) 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 multiple Purchasers), the consent of such disproportionately impacted Purchaser (or multiple 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 proposed amendment or waiver that disproportionately, materially and adversely affects the rights and obligations of any Purchaser relative to the comparable rights and obligations of the other Purchasers shall require the prior written consent of such adversely affected Purchaser. 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.”
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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 4.8 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 law of the State of Nevada without regard to the principles of conflicts of law thereof.
5.10. Arbitration. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors, officers, stockholders, employees or agents) shall be commenced exclusively by arbitration be administered by Mediation and Civil Arbitration, Inc. d/b/a RapidRuling (www.rapidruling.com) in accordance with its Commercial Arbitration Rules effective at the time a claim is made (the “Rules”), and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. Arbitrators shall be appointed by RapidRuling. The place of arbitration shall be New York, New York, and any hearing shall be held via video or telephone conference. The parties hereto agree that no objection shall be taken to the decision, order or award of the tribunal following any such hearing on the basis that the hearing was held by video or telephone conference. The parties hereto consent to electronic service of process, with service to be made to the following email addresses the Company: [email protected], with a copy to [email protected], and Investor: [ ]. All such service of process may come from the opposing party’s email listed here, [email protected]. The parties hereto shall list all said email addresses as “safe senders” (or other whitelist) and are responsible to check their “SPAM” and “junk” type incoming messages on a daily basis. In any such arbitration award, the arbitrator shall require the breaching party (if any), as finally determined by the arbitrator, to pay the non-breaching Party’s costs and expenses (including such nonbreaching party’s reasonable attorneys’ fees, arbitration costs, court costs, and other expenses) associated with enforcing the Agreement and collecting any judgment related thereto. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement.
5.11. Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.
5.12. 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. If 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.
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5.13. 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.
5.14. 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 a conversion of a share of Preferred Stock, the applicable Purchaser shall be required to return any Class A Common Stock subject to any such rescinded Notice of Conversion concurrently with the restoration of such Purchaser’s share of Preferred Stock so converted and such Purchaser’s right to acquire such Conversion Shares upon conversion of such Preferred Stock (including, issuance of a replacement book-entry statement (or certificate) evidencing such restored share of Preferred Stock).
5.15. 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.
5.16. 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.
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5.17. 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.
5.18. 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. For reasons of administrative convenience only, each Purchaser and its respective counsel have chosen to communicate with the Company through the legal counsel to the Placement Agent. The legal counsel of the Placement Agent does not represent any of the Purchasers and only represents the Placement Agent. 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 Calendar 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 Class A 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 Class A 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.
[BOXL Securities Purchase Agreement Signature Pages Follow]
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[BOXL Securities Purchase Agreement – Company Signature Page]
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.
BOXLIGHT CORPORATION |
Address for Notice: | ||
| | |||
| By: | Email: | ||
| Name: | Ryan Zeek | ||
| Title: | Chief Financial Officer | ||
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[BOXL Securities Purchase Agreement – Investor Signature Page]
IN WITNESS WHEREOF, the undersigned has caused this Securities Purchase Agreement to be duly executed by its authorized signatory 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: | [●] | |
| Tranche Percentage: | [●]% | |
| | ||
| shares of Preferred Stock: | [●] | |
| Beneficial Ownership Blocker: | [●] | |
| | ||
| Employer Identification Number: | [●] |
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Exhibit 1.10.1
Form of Certificate of Designation
Exhibit 1.36.1
Form of Lock-Up Agreement
Exhibit 1.36.2
Lock-Up Parties
| ● | [ ] |
Exhibit 1.49
Form of Registration Rights Agreement
Exhibit 1.23
Form of ELOC
Exhibit 10.2
Business Entity - Filing Acknowledgement 08/07/2026 Work Order Item Number: W2026080701124 - 5392926 Filing Number: 20265956367 Filing Type: Certificate of Designation Filing Date/Time: 08/07/2026 13:45:54 PM Filing Page(s): 12 Indexed Entity Information: Entity ID: E0482222014-8 Entity Name: BOXLIGHT CORPORATION Entity Status: Active Expiration Date: None Commercial Registered Agent C T CORPORATION SYSTEM** 701 S CARSON ST STE 200, Carson City, NV 89701, USA FRANCISCO V. AGUILAR Secretary of State STATE OF NEVADA OFFICE OF THE SECRETARY OF STATE C. MURPHY HEBERT Chief Deputy Secretary of State DEANNA L. REYNOLDS Deputy Secretary for Commercial Recordings The attached document(s) were filed with the Nevada Secretary of State, Commercial Recording Division. The filing date and time have been affixed to each document, indicating the date and time of filing. A filing number is also affixed and can be used to reference this document in the future. Respectfully, FRANCISCO V. AGUILAR Secretary of State Page 1 of 1 Commercial Recording 401 N. Carson Street Carson City, NV 89701 1 State of Nevada Way Las Vegas, NV 89119
TYPE OR PRINT - USE DARK INK ONLY - DO NOT HIGHLIGHT 1. Entity information: Name of entity: BOXLIGHT CORPORATION Entity or Nevada Business Identification Number (NVID): NV20141594766 2. Effective date and time: For Certificate of Designation or Amendment to Designation Only Date: Time: (Optional): (must not be later than 90 days after the certificate is filed) 3. Class or series of stock: (Certificate of Designation only) The class or series of stock being designated within this filing: Series D Preferred Stock 4. Information for amendment of class or series of stock: The original class or series of stock being amended within this filing: 5. Amendment of class or series of stock: Certificate of Amendment to Designation- Before Issuance of Class or Series As of the date of this certificate no shares of the class or series of stock have been issued. Certificate of Amendment to Designation- After Issuance of Class or Series The amendment has been approved by the vote of stockholders holding shares in the corporation entitling them to exercise a majority of the voting power, or such greater proportion of the voting power as may be required by the articles of incorporation or the certificate of designation. 6.Resolution: (Certificate of Designation and Amendment to Designation only) By resolution of the board of directors pursuant to a provision in the articles of incorporation this certificate establishes OR amends the following regarding the voting powers, designations, preferences, limitations, restrictions and relative rights of the following class or series of stock.* 7. Withdrawal: Designation being Withdrawn: Date of Designation: No shares of the class or series of stock being withdrawn are outstanding. The resolution of the board of directors authorizing the withdrawal of the certificate of designation establishing the class or series of stock: * 8. Signature: (Required) X Signature of Officer Ryan Zeek Date: 08/07/2026 FRANCISCO V. AGUILAR Secretary of State 401 North Carson Street Carson City, Nevada 89701-4201 (775) 684-5708 Website: www.nvsos.gov www.nvsilverflume.gov Certificate, Amendment or Withdrawal of Designation NRS 78.1955, 78.1955(6) Certificate of Designation Certificate of Amendment to Designation - Before Issuance of Class or Series Certificate of Amendment to Designation - After Issuance of Class or Series Certificate of Withdrawal of Certificate of Designation This form must be accompanied by appropriate fees. page1 of 1 Revised: 1/1/2019 Filed in the Office of Secretary of State State Of Nevada Business Number E0482222014-8 Filing Number 20265956367 Filed On 08/07/2026 13:45:54 PM Number of Pages 12
Exhibit A to Certificate of Designation
BOXLIGHT CORPORATION
The undersigned, the Chief Executive Officer of Boxlight Corporation, a Nevada corporation (the “Corporation”), does hereby certify that, pursuant to Nevada Revised Statute 78.1955 and the authority conferred upon the Board of Directors by the Articles of Incorporation of the Corporation, the following resolution creating a series of preferred stock to be designated as Series D Convertible Preferred Stock, was duly adopted on July 23, 2026.
RESOLVED, that pursuant to the authority expressly granted to and vested in the Board of Directors of the Corporation by provisions of the Articles of Incorporation of the Corporation, as amended and restated on December 13, 2016 as document number 20160540929-18, and as further amended, (the “Articles of Incorporation”), there hereby is created out of the 50,000,000 shares of authorized preferred stock, par value $0.0001 per share (the “Preferred Stock”), of the Corporation, as authorized in Article FOURTH of the Corporation’s Articles of Incorporation, a series of Preferred Stock of the Corporation, to be designated “Series D Preferred Stock,” consisting of up to 937,500 shares of the Corporation’s Series D non-voting convertible preferred stock, par value $0.0001 per share, which Series D Preferred Stock shall have the following designations, powers, preferences and relative and other special rights and the following qualifications, limitations and restrictions:
TERMS OF SERIES D CONVERTIBLE PREFERRED STOCK
1. Designation and Number.
(a) A series of Preferred Stock of the Corporation, designated as non-voting, convertible Series D Preferred Stock, par value $0.0001 per share (“Series D Preferred Stock”), is hereby established. The number of authorized shares of Series D Preferred Stock to be issued shall be 937,500 shares.
(b) The stated and liquidation value of the Series D Preferred Stock shall be Ten Dollars ($10.00) per share (“Stated Value”). The Series D Preferred Stock is being issued at a purchase price of Eight Dollars ($8.00) per share, reflecting an original issue discount of twenty percent (20%) of the Stated Value.
(c) The Series D Preferred Stock is being issued to each of the several purchasers signatory to that certain securities purchase agreement among such purchasers and the Corporation, dated August 5, 2026 (the “Securities Purchase Agreement”) (each such purchaser, a “Purchaser” and, collectively, the “Purchasers”). Unless otherwise separately defined in this Certificate of Designation (this “Certificate”), all capitalized terms, when used herein, shall have the same meaning as they are defined in the Securities Purchase Agreement.
(d) As used in this Certificate, the term “Holders” shall mean the Purchasers or one or more other holder(s) of shares of Series D Preferred Stock.
2. Rank. All shares of the Series D Preferred Stock shall rank:
(a) senior to (i) the Corporation’s Class A voting common Stock, $0.0001 par value per share, of the Corporation (the “Class A Common Stock”); and (ii) the Corporation’s Class B non-voting common Stock, $0.0001 par value per share, of the Corporation and (iii) except as set forth in Section 2(b) below, any other class of Preferred Stock which shall be specifically designated as junior to the Series D Preferred Stock, (collectively, the “Junior Securities”), in each case as to distribution of assets upon liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary;
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(b) pari passu and on parity with any other class or series of Preferred Stock of the Corporation hereafter created specifically ranking, by its terms, on parity with the Series D Preferred Stock (the “Pari Passu Securities”); and
(c) junior to any class or series of secured debt securities or indebtedness of the Corporation hereafter created specifically ranking, by its terms, senior to the Series D Preferred Stock (collectively, the “Senior Securities”), in each case as to distribution of assets upon liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary.
3. Dividends.
Except as set forth in this Section 3, the Series D Preferred Stock shall not accrue or pay any dividend. From and after the first Dividend Trigger Event (as defined below) to occur, each outstanding share of Series D Preferred Stock shall accrue a cumulative dividend at a rate of twenty percent (20%) per annum of the Stated Value then in effect (the “Default Dividend”). The Default Dividend shall accrue daily (whether or not declared and whether or not the Corporation has funds legally available therefor), shall be payable monthly in arrears on the first Trading Day of each calendar month, and shall continue to accrue and be payable for so long as such Dividend Trigger Event continues. The Default Dividend shall be payable, solely, in kind, by adding the amount of such Default Dividend to, and thereby increasing, the Stated Value of such shares. . A “Dividend Trigger Event” means the earliest to occur of (i) an Event of Default (as defined in Section 20), and (ii) any date on which the Class A Common Stock trades below the Floor Price then in effect for a period of five (5) consecutive days.
4. Liquidation Preference.
In the event of a merger, sale (of substantially all assets or stock), any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, then, either (i) after any distribution or payment on Senior Securities, (ii) simultaneous and on a pro-rata basis with any distribution or payment on Pari Passu Securities, and (iii) before any distribution or payment shall be made to the Holders of the Common Stock or any other Junior Securities, each Holder of Series D Preferred Stock then outstanding shall be entitled to be paid, out of the assets of the Corporation available for distribution to its stockholders, an amount (the “Liquidation Preference”) equal to the aggregate number of shares of Series D Preferred Stock then outstanding multiplied by ten dollars ($10.00). If the assets of the Corporation are not sufficient to generate cash sufficient to pay in full the Liquidation Preference, then the Holders of Series D Preferred Stock shall share ratably (together with Holders of any Pari Passu Securities) in any distribution of cash generated by such assets in accordance with the respective amounts that would have been payable in such distribution as if the amounts to which the Holders of outstanding shares of Series D Preferred Stock are entitled were paid in full.
5. Voting Rights.
Except as otherwise set forth herein, the Holders of Series D Preferred Stock shall have no right to vote as a separate class on any matter submitted to vote by the stockholders of the Corporation, excluding, however, any proposed amendment that would adversely alter or change any preference or any relative or other right given to the Series D Preferred Stock; in which event the Series D Preferred Stock may vote as a separate class with respect to such amendment.
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6. Conversion.
(a) Optional Conversion. The Series D Preferred Stock may be converted, at any time and from time to time on or after the Initial Issuance Date, in whole or in part, at the option of any one or more Holder into shares of Class A Common Stock of the Corporation (the “Conversion Shares”), subject at all times to the Beneficial Ownership Limitation set forth in Section 6(e) and the Exchange Cap set forth in Section 10, at the Conversion Price per share set forth in Section 6(b) below.
(b) Conversion Price. The “Conversion Price” per share shall be equal to the greater of (i) the Adjusted Floor Price then in effect and (ii) eighty percent (80%) of the lowest closing price of the Class A Common Stock on the Nasdaq Capital Market (or other principal Trading Market) on any Trading Day during the five (5) consecutive Trading Days ending on, and including, the Trading Day immediately prior to the applicable Conversion Date (i.e., a twenty percent (20%) discount to such lowest closing price). Such Conversion Price shall be subject to adjustment pursuant to Section 8 below. Each share of Series D Preferred Stock shall be convertible into that number of shares of Class A Common Stock as shall be determined by dividing (i) the Stated Value ($10.00) by (ii) the Conversion Price then in effect.
(c) Floor Price. The “Floor Price” shall initially mean an amount equal to twenty percent (20%) of the “Minimum Price” (as defined in Nasdaq Listing Rule 5635(d)) of the Class A Common Stock on the Trading Day immediately prior to the Initial Issuance Date, being $$0.6160 (subject to adjustment as provided herein). Notwithstanding anything herein to the contrary, in no event shall the Conversion Price be less than the Adjusted Floor Price then in effect. Notwithstanding anything herein to the contrary, from and after any date on which the Class A Common Stock ceases to be listed on a national securities exchange and commences trading on the OTC Markets (or any successor over-the-counter marketplace), the Floor Price and the Adjusted Floor Price shall cease to apply, and the Conversion Price shall thereafter be determined pursuant to clause (ii) of Section 6(b) without regard to clause (i) thereof (subject only to the par value of the Class A Common Stock).
(d) Adjusted Floor Price; Reset. (i) “Adjusted Floor Price” means, as determined on each six-month anniversary of the Initial Issuance Date (each, a “Floor Adjustment Date”), the lower of (A) the Floor Price then in effect and (B) twenty percent (20%) of the lower of (x) the Nasdaq closing price of the Class A Common Stock on the Trading Day ended immediately prior to such Floor Adjustment Date and (y) the quotient of (I) the sum of the Nasdaq closing prices of the Class A Common Stock on each Trading Day of the five (5) Trading Day period ended on, and including, the Trading Day ended immediately prior to such Floor Adjustment Date, divided by (II) five (5), in each case appropriately adjusted for any stock split, stock dividend, stock combination, recapitalization or other similar transaction during the applicable measuring period. (ii) So long as ten percent (10%) or more of the Series D Preferred Stock (measured by Stated Value) remains outstanding after the date that is six (6) months following the Registration Date, if the Corporation shall sell or issue any Class A Common Stock, convertible notes, convertible preferred stock or warrants (or other Common Stock equivalents) with a sale, conversion or exercise price, as applicable, below the Floor Price then in effect, the Floor Price (and, correspondingly, the Adjusted Floor Price) shall automatically be reset to such lower price. Prior to the first Floor Adjustment Date, the Adjusted Floor Price shall be equal to the Floor Price then in effect, and references herein to the Adjusted Floor Price then in effect shall be construed accordingly.
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(e) Beneficial Ownership Limitation. Notwithstanding anything herein to the contrary, the Corporation shall not effect any conversion of Series D Preferred Stock, and no Holder shall have the right to convert any portion of its Series D Preferred Stock, to the extent that, after giving effect to such conversion, such Holder (together with such Holder’s Affiliates, and any other Persons acting as a group together with such Holder or any of such Holder’s Affiliates) would beneficially own in excess of 4.99% of the number of shares of Class A Common Stock outstanding immediately after giving effect to such conversion (the “Beneficial Ownership Limitation”). For purposes of the foregoing, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended. The Beneficial Ownership Limitation may not be waived and shall apply to any successor Holder of the Series D Preferred Stock. Any purported conversion in violation of this Section 6(e) shall be void ab initio to the extent of such excess.
7. Notice of Conversion.
(a) In order to cause the Conversion of shares of Series D Preferred Stock pursuant to Section 6(a), the Holder of Series D Preferred Stock shall: (i) email (or otherwise deliver) a copy of the fully executed notice of Conversion in the form attached hereto as Annex A to the Corporation (Attention: Chief Financial Officer), on the applicable Conversion Date (the “Notice of Conversion”) and (ii) the Holder of Series D Preferred Stock shall surrender or cause to be surrendered only those original certificates of Series D Preferred Stock that shall be converted into Conversion Shares (the “Series D Preferred Stock Certificates”), duly endorsed. Upon receipt by the Corporation of the Holder’s original certificates representing the Series D Preferred Stock subject to Conversion and the Notice of Conversion, the Corporation shall promptly send, via email, a confirmation to such Holder stating that the Series D Preferred Stock Certificates has been received. On (i) the same Trading Day on which the Corporation has received a Notice of Conversion, in the case of a Notice of Conversion received by the Corporation at or prior to 12:00 p.m., New York time, on a Trading Day, and (ii) 11:00 a.m., New York time, on the Trading Day immediately following the date on which the Corporation has received a Notice of Conversion, in the case of a Notice of Conversion received by the Corporation after 12:00 p.m., New York time, or on a day that is not a Trading Day (or such earlier date as required pursuant to the Securities Exchange Act of 1934, as amended, or other applicable law, rule or regulation for the settlement of a trade initiated on the applicable Conversion Date of such Conversion Shares issuable pursuant to such Notice of Conversion), the Corporation shall (1) provided that its transfer agent is participating in the DTC Fast Automated Securities Transfer Program, credit such aggregate number of Conversion Shares to which the Holder shall be entitled pursuant to such conversion to the Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system or (2) if its transfer agent is not participating in the DTC Fast Automated Securities Transfer Program, upon the request of the Holder, issue and deliver (via reputable overnight courier) to the address as specified in the Notice of Conversion, a certificate, registered in the name of the Holder or its designee, for the number of Conversion Shares to which the Holder shall be entitled pursuant to such conversion.
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(b) Delivery Failure; Buy-In. If the Corporation fails, for any reason or for no reason, to deliver to a Holder the Conversion Shares to which such Holder is entitled by the applicable delivery deadline set forth in Section 7(a) (a “Delivery Failure”), then, in addition to all other remedies available to such Holder, the Corporation shall pay to such Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Conversion Shares (based on the applicable Conversion Price) subject to such Delivery Failure, the sum of (1) $20 per Trading Day (increasing to $35 per Trading Day on the second (2nd) Trading Day after such Delivery Failure and on each Trading Day thereafter) until such Conversion Shares are delivered or such Holder rescinds the applicable Conversion, and (2) the product of (x) the number of such Conversion Shares and (y) the difference between the highest trade price and the lowest trade price of the Class A Common Stock on the Trading Market during the period beginning on the applicable Conversion Date and ending on (i) the date on which such Conversion Shares are delivered to such Holder’s prime broker and are available to be sold by such Holder or (ii) if such Holder rescinds the applicable Conversion, the date of such rescission. If, on or after the applicable delivery deadline, a Holder is required by its broker to purchase (in an open market transaction or otherwise), or such Holder’s brokerage firm otherwise purchases, shares of Class A Common Stock to deliver in satisfaction of a sale by such Holder of Conversion Shares that such Holder anticipated receiving from the Corporation (a “Buy-In”), then the Corporation shall, at such Holder’s election, (A) pay in cash to such Holder the amount, if any, by which such Holder’s total purchase price (including brokerage commissions, if any) for the shares of Class A Common Stock so purchased exceeds the product of (x) the aggregate number of Conversion Shares that the Corporation was required to deliver multiplied by (y) the price at which the sell order giving rise to such Buy-In was executed, and (B) either reinstate the shares of Series D Preferred Stock and equivalent number of Conversion Shares for which such Conversion was not honored (in which case such Conversion shall be deemed rescinded) or deliver to such Holder the number of shares of Class A Common Stock that would have been issued had the Corporation timely complied with its delivery obligations hereunder. The Corporation shall maintain, at all times while any shares of Series D Preferred Stock remain outstanding, a transfer agent that is a participant in the DTC Fast Automated Securities Transfer Program. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity.
8. Adjustment for Reclassification, Exchange, and Substitution.
If at any time or from time to time after the Initial Issuance Date, the shares of the Corporation’s Class A Common Stock (which shall include the Conversion Shares issuable upon the conversion of the Series D Preferred Stock), shall be changed into the same or a different number of shares of any class or classes of stock, whether by forward or reverse split(s) of the outstanding Corporation Class A Common Stock, recapitalization, reclassification, reorganization, merger, exchange, consolidation, sale of assets or otherwise, then, in any such event, each Holder of Series D Preferred Stock shall have the right thereafter to convert such Series D Preferred Stock into the kind and amount of stock and other securities and property receivable upon such stock split(s), recapitalization, reclassification, reorganization, merger, exchange, consolidation, sale of assets or other change into the number of Conversion Shares into which such shares of Series D Preferred Stock could have been converted immediately prior to such forward or reverse split(s), recapitalization, reclassification, reorganization, merger, exchange, consolidation, sale of assets or other change, or with respect to such other securities or property by the terms thereof.
9. Reservation of Class A Common Stock Issuable Upon Conversion.
The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Class A Common Stock, solely for the purpose of effecting the conversion of the shares of the Series D Preferred Stock, such number of its shares of Class A Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of the Series D Preferred Stock (calculated at 300% of the number of shares of Class A Common Stock issuable upon conversion in full at the Floor Price then in effect); and if at any time the number of authorized but unissued shares of Class A Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Series D Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Class A Common Stock to such number of shares as shall be sufficient for such purpose, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to the Corporation’s Articles of Incorporation.
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10. Exchange Cap; Stockholder Approval; Reverse Split.
Notwithstanding anything herein to the contrary, unless and until the Corporation obtains the Required Stockholder Approvals, the Corporation shall not issue, upon conversion of the Series D Preferred Stock, a number of shares of Class A Common Stock exceeding 19.99% of the shares of Class A Common Stock outstanding as of the Closing Date (as defined in the Securities Purchase Agreement) (the “Exchange Cap”), as and to the extent required by Nasdaq Listing Rule 5635(d). In the event that the aggregate number of Conversion Shares into which all shares of Series D Preferred Stock and all shares of Series D Preferred Stock issued pursuant to the Securities Purchase Agreement may be converted shall equal or exceed twenty (20%) percent of the issued and outstanding shares of Class A Common Stock of the Corporation, then and in such event, and, in accordance with Nasdaq Rule 5635(d), the Corporation shall, as promptly as practicable following the Initial Issuance Date (but in any event no later than 20 days after the Initial Issuance Date), hold a special meeting of its stockholders for the purpose of approving, adopting and ratifying (a) all of the transactions contemplated by the Securities Purchase Agreement, (b) the issuance of shares of Class A Common Stock upon conversion of the Series D Preferred Stock, and the issuance of shares of Class A Common Stock pursuant to the ELOC, in each case in excess of the Exchange Cap, and (c) one or more reverse stock splits of the Class A Common Stock of up to 500-to-1, as and when determined by the Board of Directors, and (d) an increase in the number of authorized shares of Class A Common Stock as and when needed to satisfy the Corporation’s obligations under the Securities Purchase Agreement and this Certificate (the “Required Stockholder Approvals”). In the event that for any reason, the requisite holders of a majority of the issued and outstanding shares of Class A Common Stock of the Corporation do not provide such Required Stockholder Approvals, then and in such event, the Series D Preferred Stock shall remain subject to optional conversion into Conversion Shares to the extent the aggregate number of Conversion Shares issued upon conversion does not exceed the Exchange Cap, and the Corporation shall call and hold additional meetings of its stockholders for the purpose of obtaining the Required Stockholder Approvals at least once every twenty (20) days thereafter until the Required Stockholder Approvals are obtained.
11. Reserved.
12. Fractional Shares.
No fractional share shall be issued upon the conversion of any share or shares of Series D Preferred Stock. All shares of Class A Common Stock of the Corporation (including fractions thereof) issuable upon conversion of more than one share of Series D Preferred Stock by a Holder thereof shall be aggregated for purposes of determining whether the conversion would result in the issuance of any fractional share.
13. No Reissuance of Series D Preferred Stock.
No share or shares of Series D Preferred Stock acquired by the Corporation by reason of purchase, conversion or otherwise shall be reissued, and all such shares shall be canceled, retired and eliminated from the shares which the Corporation shall be authorized to issue.
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14. Amendment.
This Certificate or any provision hereof may be amended by obtaining the affirmative vote at a meeting duly called for such purpose, or written consent without a meeting in accordance with the Nevada Revised Statutes, of (i) the Holders of a majority of the outstanding shares of Series D Preferred Stock, voting separate as a single class, (ii) with such other stockholder approval, if any, as may then be required pursuant to the Nevada Revised Statutes and the Articles of Incorporation, and (iii) the Board of Directors of the Corporation.
15. Protective Provisions.
So long as any shares of Series D Preferred Stock are outstanding, the Corporation shall not, nor shall it permit any of its Subsidiaries to, take any of the following corporate actions (whether by merger, consolidation or otherwise) without first obtaining the approval (by vote or written consent) of the Holders of a majority of the issued and outstanding shares of Series D Preferred Stock (the “Series D Majority Holders”):
(a) alter or change the rights, preferences or privileges of the Series D Preferred Stock, or increase the authorized number of shares of Series D Preferred Stock; or
(b) issue any additional shares of Series D Preferred Stock.
(c) directly or indirectly, effect or enter into any Variable Rate Transaction, other than the ELOC.
Notwithstanding the foregoing, no change pursuant to this Section 15 shall be effective to the extent that, by its terms, it applies to less than all of the Holders of shares of Series D Preferred Stock then outstanding.
16. Cancellation of Series D Preferred Stock.
If any shares of Series D Preferred Stock are converted pursuant to this Certificate, the shares so converted shall be canceled, shall return to the status of authorized, but unissued Preferred Stock of no designated series, and shall not be issuable by the Corporation as Series D Preferred Stock.
17. Lost or Stolen Certificates.
Upon receipt by the Corporation of (i) evidence of the lost, theft, destruction or mutilation of any Series D Preferred Stock Certificate(s) and (ii) (y) in the case of loss, theft or destruction, indemnity (without any bond or other security) reasonably satisfactory to the Corporation, or (z) in the case of mutilation, the Series D Preferred Stock Certificate(s) (surrendered for cancellation), the Corporation shall execute and deliver new Series D Preferred Stock Certificate(s) of like tenor and date. However, the Corporation shall not be obligated to reissue such lost, stolen, destroyed or mutilated Series D Preferred Stock Certificate(s) if the Holders contemporaneously requests the Corporation to convert such Series D Preferred Stock.
18. Waiver.
Notwithstanding any provision in this Certificate to the contrary, any provision contained herein and any right of the Holders of Series D Preferred Stock granted hereunder may be waived as to all shares of Series D Preferred Stock (and the Holders thereof) upon the written consent of the Series D Majority Holders, unless a higher percentage is required by applicable law, in which case the written consent of the Holders of not less than such higher percentage of shares of Series D Preferred Stock shall be required.
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19. Representations and Warranties; Covenants.
(a) Representations and Warranties. The Corporation represents and warrants to each Holder that, as of the Initial Issuance Date: (i) the Corporation is duly incorporated, validly existing and in good standing under the laws of the State of Nevada, with all requisite corporate power and authority to execute and file this Certificate and to perform its obligations hereunder; (ii) the execution and filing of this Certificate and the issuance of the Series D Preferred Stock and the Conversion Shares have been duly authorized by all necessary corporate action on the part of the Corporation; (iii) the shares of Series D Preferred Stock, when issued in accordance with the terms of the Securities Purchase Agreement, will be validly issued, fully paid and non-assessable, free and clear of all liens and encumbrances (other than restrictions on transfer arising under applicable securities laws), and the Conversion Shares, when issued upon conversion of the Series D Preferred Stock in accordance with this Certificate, will be validly issued, fully paid and non-assessable; (iv) the execution and filing of this Certificate and the performance by the Corporation of its obligations hereunder do not and will not conflict with or result in a violation of the Articles of Incorporation or bylaws of the Corporation, any applicable law, rule or regulation, or any material agreement to which the Corporation is a party; and (v) each of the representations and warranties of the Corporation set forth in the Securities Purchase Agreement is incorporated herein by reference, mutatis mutandis, as if fully set forth herein, for the benefit of the Holders.
(b) Affirmative Covenants. So long as any shares of Series D Preferred Stock remain outstanding, the Corporation shall: (i) timely file (or timely obtain an extension in respect thereof and file within the applicable grace period) all reports, schedules, forms, statements and other documents required to be filed by it under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and otherwise remain current in its reporting obligations with the U.S. Securities and Exchange Commission (the “SEC”); (ii) use best efforts to maintain the listing or quotation of the Class A Common Stock on the Trading Market, and not take any action that would reasonably be expected to result in the delisting or suspension of the Class A Common Stock from the Trading Market; (iii) at all times reserve and keep available the number of shares of Class A Common Stock required to be reserved pursuant to Section 9; (iv) at all times maintain a transfer agent that participates in good standing in the DTC Fast Automated Securities Transfer Program (and the Corporation shall not replace its transfer agent without the prior written consent of the Series D Majority Holders) and use best efforts to maintain the eligibility of the Class A Common Stock for deposit and clearing through the facilities of The Depository Trust Company; and (v) comply in all material respects with its obligations under this Certificate and the other Transaction Documents.
(c) Negative Covenants. The negative covenants applicable to the Corporation for the benefit of the Holders are set forth in Section 15 (Protective Provisions), which are incorporated herein by reference.
(d) Noncircumvention. The Corporation shall not, by amendment of its Articles of Incorporation or bylaws, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issuance 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 Certificate, and shall at all times in good faith carry out all of the provisions of this Certificate and take all action as may be necessary or appropriate to protect the rights of the Holders against impairment.
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20. Events of Default; Remedies.
(a) Events of Default. Each of the following shall constitute an “Event of Default”: (i) a Delivery Failure occurs and continues, or the Corporation fails to remove a restrictive legend from any Conversion Shares when required, in either case for two (2) Trading Days after the applicable deadline; (ii) the Corporation fails to pay any Default Dividend when due and such failure continues for three (3) Trading Days; (iii) the Corporation breaches in any material respect any representation, warranty, covenant or other term or condition of this Certificate or any other Transaction Document (other than a breach otherwise specifically addressed in this Section 20(a)); (iv) the Class A Common Stock is delisted from the Trading Market, or the Class A Common Stock is suspended from trading on the Trading Market and such suspension continues for more than one (1) Trading Day; (v) the Corporation fails to remain current in its reporting obligations with the SEC; (vi) the Corporation fails to reserve and keep available the number of shares required pursuant to Section 9, or fails to maintain a transfer agent participating in the DTC Fast Automated Securities Transfer Program, or replaces its transfer agent without the prior written consent of the Series D Majority Holders, or the Class A Common Stock becomes subject to any “chill,” “freeze” or similar restriction imposed by The Depository Trust Company and such failure continues for more than one (1) Trading Day; (vii) at any time a Holder is unable to rely on an effective registration statement covering the resale of the Conversion Shares as and when required under the Registration Rights Agreement; or (viii) the Corporation, voluntarily or involuntarily, commences or becomes the subject of any bankruptcy, insolvency, reorganization, receivership or similar proceeding, and, in the case of an involuntary proceeding, such proceeding is not dismissed within thirty (30) days of its initiation.
(b) Notice of Event of Default. Upon the occurrence of an Event of Default, the Corporation shall, within one (1) Trading Day after the Corporation becomes aware thereof, deliver written notice thereof to each Holder.
(c) Remedies. Immediately upon the occurrence of any Event of Default, and without any further action by the Holders or the Corporation, the Stated Value of each outstanding share of Series D Preferred Stock shall automatically be increased by twenty percent (20%) (the “Default Premium”), and such increased amount shall thereafter constitute the Stated Value of such share for all purposes of this Certificate (including, without limitation, for purposes of the conversion provisions of Section 6, the Default Dividend under Section 3 and the Liquidation Preference under Section 4). The Default Premium shall be in addition to, and not in lieu of, the Default Dividend and any other rights or remedies available to the Holders under this Certificate, at law or in equity. For the avoidance of doubt and notwithstanding anything herein to the contrary, upon an Event of Default the Holders shall not have any right to require the Corporation to redeem, repurchase or repay the Series D Preferred Stock for cash, it being the intention of the Corporation and the Holders that the Series D Preferred Stock be treated as equity for financial reporting purposes.
21. Certain Definitions.
As used in this Certificate, the term “Subsidiary” shall mean, as it applies to the Corporation, any one or more Persons, a majority of the capital stock or other equity interests of which are owned directly or indirectly (through another Subsidiary) by the Corporation. In addition, as used in this Certificate, the following terms have the meanings set forth below:
“Affiliate” has the meaning ascribed to such term in the Securities Purchase Agreement.
“Conversion Date” means the date a Notice of Conversion is delivered to the Corporation in accordance with Section 7.
“ELOC” means the Equity Purchase Agreement, dated as of the date hereof, by and between the Corporation and [ ], as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.
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“Initial Issuance Date” means the date on which the first share of Series D Preferred Stock is issued by the Corporation.
“Person” has the meaning ascribed to such term in the Securities Purchase Agreement.
“Registration Date” means the Effectiveness Date, as defined in the Securities Purchase Agreement.
“Trading Day” has the meaning ascribed to such term in the Securities Purchase Agreement.
“Trading Market” has the meaning ascribed to such term in the Securities Purchase Agreement.
“Variable Rate Transaction” has the meaning ascribed to such term in the Securities Purchase Agreement.
22. Notices.
Any notices required or permitted to be given under the terms hereof shall be sent by certified or registered mail (return receipt requested) or delivered personally, by nationally recognized overnight carrier or by electronic mail and shall be effective five days after being placed in the mail, if mailed, or upon receipt or refusal of receipt, if delivered personally or by nationally recognized overnight carrier, or upon transmission, if sent by electronic mail (provided that no notice of non-delivery or delivery failure is received by the sender), addressed to a party. The addresses for such communications are as set forth in the Securities Purchase Agreement, or such other address as may be designated in writing hereafter, in the same manner, by such person.
The undersigned declares under penalty of perjury under the laws of the State of Nevada that the matters set forth in this certificate are true and correct of his own knowledge.
The undersigned has executed this certificate on August 5, 2026.
| BOXLIGHT CORPORATION | |
| By: /s/ Ryan Zeek | |
| Name: Ryan Zeek | |
| Title: Chief Financial Officer |
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ANNEX A
FORM OF NOTICE OF CONVERSION
(To be executed by the Holder in order to convert shares of Series D Preferred Stock)
The undersigned Holder of shares of Series D Convertible Preferred Stock (the “Series D Preferred Stock”) of Boxlight Corporation, a Nevada corporation (the “Corporation”), hereby irrevocably elects to convert the number of shares of Series D Preferred Stock indicated below into shares of Class A Common Stock, $0.0001 par value per share (the “Class A Common Stock”), of the Corporation, as of the Conversion Date specified below, pursuant to, and subject to the terms and conditions of, the Certificate of Designation of the Series D Convertible Preferred Stock (the “Certificate of Designation”). Capitalized terms used but not otherwise defined herein have the meanings ascribed to them in the Certificate of Designation.
Conversion Date: [●]
Number of shares of Series D Preferred Stock to be converted: [●]
Aggregate Stated Value of shares to be converted (at $10.00 per share): $[●]
Applicable Conversion Price (determined under Section 6(b) of the Certificate of Designation): $[●]
Number of shares of Class A Common Stock to be issued (the “Conversion Shares”): [●]
Please issue the Conversion Shares in the name set forth below and deliver them as indicated:
Name of Holder: [●]
Address: [●]
DWAC / DTC participant (broker) name and number; account number: [●]
Delivery instructions (if certificated): [●]
The undersigned represents that, after giving effect to the conversion requested hereby, the undersigned (together with its Affiliates and any other Persons acting as a group with the undersigned) will not beneficially own shares of Class A Common Stock in excess of the Beneficial Ownership Limitation set forth in Section 6(e) of the Certificate of Designation, and that the issuance of the Conversion Shares requested hereby complies with the Exchange Cap set forth in Section 10 of the Certificate of Designation.
HOLDER:
[●]
(Name of Holder)
By: [●]
Name: [●]
Title: [●]
Date: [●]
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Exhibit 10.3
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this “Agreement”) is made and entered into as of August 5, 2026, between Boxlight Corporation, a Nevada 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 “Securities 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 Securities Purchase Agreement shall have the meanings given such terms in the Securities 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. “Closing Date” shall have the meaning set forth in the Securities Purchase Agreement.
1.3. “Effectiveness Period” shall have the meaning set forth in Section 2.1.
1.4. “Filing Date” means, with respect to the Initial Registration Statement required hereunder, the date that is thirty (30) Calendar Days after the Closing Date, 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.
1.5. “Holder” or “Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities.
1.6. “Initial Registration Statement” means the initial Registration Statement filed pursuant to this Agreement.
1.7. “Losses” shall have the meaning set forth in Section 5.1.
1.8. “Plan of Distribution” shall have the meaning set forth in Section 2.1.
1.9. “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.
1.10. “Registrable Securities” means, as of any date of determination, (a) 200% of all Conversion Shares then issued or issuable upon conversion of the Preferred Stock (assuming that the Conversion Shares are converted at the Adjusted Floor Price (as defined in the Certificate of Designation)), (b) all shares of Class A Common Stock issued and issuable to the Holders pursuant to the ELOC (as defined in the Securities Purchase Agreement) (assuming, for purposes of determining the number thereof, the maximum number of shares of Class A Common Stock that may be issued to the Holders under the ELOC), and (c) 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 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).
1.11. “Registration Statement” means any registration statement required to be filed (or confidentially submitted) 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. For the sake of clarity, a Registration Statement must include or incorporate by reference, financial statements that satisfy the requirements of Regulation S-X (including requirements as to the age of financial statements) to satisfy the definitions of Registration Statement in this Section 1.12.
1.12. “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.
1.13. “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.
1.14. “Selling Stockholder Questionnaire” shall have the meaning set forth in Section 3.1.
1.15. “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.
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| 2. | Registration Statement. |
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. Notwithstanding the foregoing, the Company shall initially submit the Initial Registration Statement to the Commission on a confidential basis as a draft registration statement in accordance with the Commission’s nonpublic review procedures; the Company’s confidential submission of the Initial Registration Statement on or prior to the Filing Date shall satisfy the Company’s obligation under this Section 2.1 to file the Initial Registration Statement by the Filing Date, and the Company shall thereafter publicly file the Initial Registration Statement as promptly as practicable following completion of the Commission’s nonpublic review thereof. 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 2.4) 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 no event later than the earlier of (x) sixty (60) Calendar Days after the Closing Date and (y) the second (2nd) Trading Day after the date the Company is notified (orally or in writing, whichever is earlier) by the Commission that the Registration Statement will not be reviewed or is no longer subject to further review or comment, 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 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 5:30 p.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.
2.2. Notwithstanding the registration obligations set forth in Section 2.1, if all of the Registrable Securities cannot, as a result of the application of the SEC Guidance, 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 best 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 such other form available to register for resale the Registrable Securities as a secondary offering, subject to the provisions of Section 2.4; with respect to filing on Form S-1 or other appropriate form; provided, however, that prior to filing such amendment, the Company shall be obligated to use reasonable best 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, 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 reasonable best 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;
2.3.2. Second, the Company shall reduce Registrable Securities represented by the Class A Common Stock issued or issuable under the ELOC (excluding the Commitment Shares) (applied, in the case that some such shares may be registered, to the Holders on a pro rata basis based on the total number of such unregistered shares held by such Holders); and
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2.3.3. Third, the Company shall reduce Registrable Securities represented by the Conversion Shares (applied, in the case that some Conversion Shares may be registered, to the Holders on a pro rata basis based on the total number of unregistered Conversion Shares held by such Holders); and
2.3.4. Fourth, the Company shall reduce Registrable Securities represented by the Class A Common Stock issued or issuable as the Commitment Shares under the ELOC (applied, in the case that some such shares may be registered, to the Holders on a pro rata basis based on the total number of such unregistered shares 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-1 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. 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.
2.5. Liquidated Damages. If: (i) the Initial Registration Statement is not filed with (or confidentially submitted to) the Commission on or prior to the Filing Date; (ii) a Registration Statement is not declared effective by the Commission on or prior to the date required under Section 2.1; (iii) after a Registration Statement is declared effective, the Holders are unable to use the Prospectus to resell their Registrable Securities for any reason; or (iv) the Company fails for any reason to satisfy the current public information requirement under Rule 144 or the conditions of Rule 172 (each, a “Registration Event”, and the date on which any Registration Event occurs, an “Event Date”), then, as partial relief for the damages to the Holders by reason thereof (which the parties agree are not capable of precise quantification), the Company shall pay to each Holder an amount in cash equal to five percent (5.0%) of the aggregate Subscription Amount (as defined in the Securities Purchase Agreement) paid by such Holder for the Registrable Securities held by such Holder on the Event Date, and an additional five percent (5.0%) of such aggregate Subscription Amount on each thirty (30)-day anniversary of the Event Date (prorated for any period of less than thirty (30) days) until the applicable Registration Event is cured (such payments, the “Liquidated Damages”). The Liquidated Damages shall be paid within two (2) Trading Days after the Event Date and within two (2) Trading Days after each subsequent thirty (30)-day anniversary until the applicable Registration Event is cured. If the Company fails to pay any Liquidated Damages when due, the Company shall pay interest thereon at a rate of eighteen percent (18%) per annum (or such lesser maximum amount permitted by applicable law) until paid in full. The Liquidated Damages payable under this Section 2.5 are in addition to, and not in lieu of, any other remedies available to the Holders at law or in equity under this Agreement.
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| 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 two (2) Trading Days 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 two (2) Trading Days 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 one (1) Trading Day prior to the Filing Date or, if later, by the end of the second (2nd) 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 possible to any comments received from the Commission with respect to a Registration Statement or any amendment thereto and provide as promptly as possible (and in any event within one (1) Trading Day) 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 or any of its Subsidiaries), 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.
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3.3. If during the Effectiveness Period, the number of Registrable Securities at any time exceeds 100% of the number of Class A Common Stock then registered in a Registration Statement, then the Company shall file as soon as 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. Notification of Certain Events. The Company shall notify the Holders of Registrable Securities upon the occurrence of any of the following events:
3.4.1. Proposed Filings; Commission Review; Effectiveness. If the Company proposes to file a Prospectus, any Prospectus supplement or any post-effective amendment to a Registration Statement, it shall notify the Holders at least one (1) Trading Day prior to such filing. If the Commission notifies the Company that it will review a Registration Statement or provides any written comments with respect thereto, the Company shall notify the Holders within one (1) Trading Day after receipt of such notice or comments. The Company shall also notify the Holders as promptly as possible, but in no event later than one (1) Trading Day after a Registration Statement or any post-effective amendment thereto becomes effective.
3.4.2. Requests for Amendments or Additional Information. If the Commission or any other federal or state governmental authority requests any amendment or supplement to a Registration Statement or Prospectus, or requests additional information, the Company shall notify the Holders as promptly as possible, but in no event later than one (1) Trading Day after receipt of such request.
3.4.3. Stop Orders. If the Commission or any other federal or state governmental authority issues any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities, or initiates or threatens to initiate any proceeding for such purpose, the Company shall notify the Holders as promptly as possible, but in no event later than within one (1) Trading Day.
3.4.4. Suspension of Qualification. If the Company receives notice of the suspension of the qualification or exemption from qualification of any Registrable Securities for sale in any jurisdiction, or of the initiation or threatened initiation of any proceeding for such purpose, the Company shall notify the Holders as promptly as possible, but in no event later than within one (1) Trading Day.
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3.4.5. Material Misstatements or Omissions. If any event occurs or the passage of time causes the financial statements included in a Registration Statement to become ineligible for inclusion therein, or causes any statement contained in a Registration Statement, Prospectus or any document incorporated or deemed incorporated therein by reference to be untrue in any material respect, or requires revisions to a Registration Statement, Prospectus or any incorporated document so that the Registration Statement or Prospectus, as applicable, 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, the Company shall notify the Holders as promptly as possible, but in no event later than one (1) Trading Day after becoming aware of such event or circumstance.
3.4.6. Pending Corporate Developments. Upon the occurrence or existence of any pending corporate development with respect to the Company that, in the reasonable good-faith judgment of the Company’s board of directors, (A) would require the disclosure of material non-public information that the Company has a bona fide business purpose for preserving as confidential, and (B) continued use of the Prospectus would render the Company unable to comply with the requirements of the Commission, in each case under circumstances that would make it impractical or inadvisable for the Holders to use the Prospectus during such period, the Company shall notify the Holders as promptly as possible, but in no event later than one (1) Trading Day after making such determination.
Any notice delivered pursuant to Sections 3.4.3 through 3.4.6 shall instruct the Holders to suspend the use of the Prospectus until the requisite changes have been made. If requested by any Holder, the Company shall confirm any notice delivered pursuant to this Section 3.4 in writing as promptly as possible, but in no event later than one (1) Trading Day after providing such notice.
Notwithstanding the foregoing, in no event shall any notice delivered pursuant to this Section 3.4 contain any material non-public information regarding the Company or any of its Subsidiaries, and the Holders shall have no duty of confidentiality to the Company or any of its Subsidiaries and no 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.
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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 during any period following the delivery of any notice pursuant to Sections 3.4.3 through 3.4.6 until the requisite changes have been made.
3.8. Prior to any resale of Registrable Securities by a Holder, use its reasonable best 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 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 Securities 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 Sections 3.4.3 through 3.4.6, as promptly as possible (and in any event within two (2) Trading Days), prepare and file a supplement or amendment, including a post-effective amendment, to the applicable 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 the 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. The Company shall use best efforts to cause any such amendment or supplement to become effective as promptly as practicable.
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3.11. Otherwise use its best 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 take such other actions as may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder.
3.12. The Company may require each selling Holder to furnish to the Company a certified statement as to the number of Class A Common Stock beneficially owned by such Holder and, if required by the Commission or the Securities Act, the natural persons thereof that have voting and dispositive control over the Class A Common Stock.
| 4. | Registration Expenses. All fees and expenses incident to the performance of, or compliance with, this Agreement by the Company (other than underwriting discounts and commissions, if any) 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 Class A Common Stock are 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. |
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| 5. | Indemnification. |
5.1. Indemnification by the Company, the Company will indemnify and hold each Holder and its directors, officers, stockholders, 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 Holder (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, stockholders, 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 “Holder 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 and actual attorneys’ fees and costs of investigation that any such Holder Party may suffer or incur (collectively, “Losses”) 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 threatened or actual action, suit, claim, investigation, inquiry or other proceeding instituted or brought against any Holder Party by any Person (including, without limitation, the Company, any stockholder of the Company, or any other third party), arising out of or relating to this Agreement, any other Transaction Document, the actual or alleged execution, delivery, performance or consummation of the transactions contemplated hereby or thereby, or the issuance, purchase, ownership or disposition of the Registrable Securities. In addition, in connection with any Registration Statement of the Company providing for the resale by the Holders of the Registrable Securities, the Company will indemnify each Holder Party, to the fullest extent permitted by applicable law, from and against any and all Losses arising out of or relating to: (i) any untrue or alleged untrue statement of a material fact contained in such 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 the light of the circumstances under which they were made) not misleading, except to the extent, but only to the extent, that such untrue statements or omissions are based solely upon information regarding such Holder Party furnished in writing to the Company by such Holder Party expressly for use therein, or (ii) 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 therewith). Notwithstanding anything to the contrary herein, the indemnification provided in this Section 5.1 shall not cover any loss, claim, damage or liability to the extent it is finally judicially determined by a court of competent jurisdiction to be attributable to such Holder Party’s material breach of any of the representations, warranties or covenants made by such Holder Party in any Transaction Document that directly gave rise to the claim for which indemnification is sought or any conduct by such Holder Party that is finally judicially determined by a court of competent jurisdiction to constitute fraud, gross negligence or willful misconduct, in each case directly causing such Losses. If any action, suit, claim, investigation, inquiry or proceeding shall be brought against any Holder Party in respect of which indemnity may be sought pursuant to this Agreement, such Holder Party shall promptly notify the Company in writing; provided, however, that the failure to give such notice shall not relieve the Company of its obligations hereunder except to the extent the Company is materially prejudiced thereby. The applicable Holder Party shall have the right, in its sole discretion, to control the defense of such action with counsel of its own choosing, and the Company shall pay, as incurred, the reasonable fees and expenses of such counsel and all other reasonable costs and expenses incurred by such Holder Party in connection with such defense. The Company will not be liable to any Holder Party under this Agreement for any settlement by a Holder Party effected without the Company’s prior written consent; provided, that any such consent shall be deemed given if not denied in writing within seven (7) days after the Company’s receipt of written notice of the proposed settlement, and such consent may not be conditioned upon any admission of liability, wrongdoing, or fault by the Holder Party. In addition, if any Holder 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 Holder Party for such collection, enforcement or action, including, but not limited to, actual attorneys’ fees and disbursements. The indemnification and other payment obligations required by this Section 5.1 shall be paid promptly during the course of the investigation, defense, collection, enforcement or action, and in any event within five (5) days after bills are received or expenses are incurred; provided, however, that if any Holder Party is finally determined by a final, non-appealable judgment not to be entitled to indemnification or payment under this Section 5.1, such Holder 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 Holder Party against the Company or others and any liabilities the Company may be subject to pursuant to law. Such indemnification 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.
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5.2. Contribution. If the indemnification under Section 5.1 is unavailable to a Holder Party or insufficient to hold a Holder Party harmless for any Losses, then the Company shall contribute to the amount paid or payable by such Holder Party, in such proportion as is appropriate to reflect the relative fault of the Company and the Holder 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 the Company and the Holder 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, the Company or the Holder 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 5.2 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 such Holder Party be greater than such Holder Party’s net gain realized from the sale of the Securities giving rise to such contribution obligation, less all expenses paid by such Holder Party in connection with any claim relating to this Section 5 and the amount of any damages such Holder Party has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. The indemnification and contribution obligations set forth in this Section are cumulative and are in addition to, and not in lieu of, any other rights or remedies available to the Holder Parties at law, in equity or otherwise.
| 6. | Miscellaneous. |
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 (including post-effective 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 Sections 3.4.3 through 3.4.6, 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 or, if earlier, the date that is five (5) Trading Days after the date of such notice from the Company. The Company will use its best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable and the Company shall notify the Holders in writing that any suspension of the use of the Prospectus has terminated and the Prospectus may again be used no later than 9:00 a.m. (New York City time) on the first Trading Day on which the Prospectus may again be used. Notwithstanding anything to the contrary, the Company shall cause its Transfer Agent to promptly issue DWAC Shares in accordance with the terms of the Securities Purchase Agreement in connection with (x) any sale of Registrable Securities with respect to which a Holder has entered into a contract for sale, or (y) any conversion of the Preferred Stock with respect to which a Holder has delivered a conversion notice, prior to such Holder’s receipt of a notice from the Company of the happening of any event of the kind described in Sections 3.4.3 through 3.4.6, and for which such Holder has not yet settled.
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6.4. Piggy-Back Registrations. Notwithstanding Section 6.2, 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 share option or other employee benefit plans, then the Company shall deliver to each Holder a written notice of such determination and, if within ten (10) Calendar 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, and such Registrable Securities shall be included in priority to, and shall not be reduced or cut back in favor of, any securities proposed to be registered by the Company or any other Person (it being understood and agreed that nothing in this Section 6.4 shall limit, waive or otherwise relieve the Company of its obligations under Section 6.2); 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.
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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 Securities 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 Securities Purchase Agreement.
6.8. No Inconsistent Agreements. 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. 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 Securities Purchase Agreement.
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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.
[BOXL Registration Rights Agreement Signature Pages Follow]
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IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.
| BOXLIGHT CORPORATION | ||
| By: | ||
| Name: | [●] | |
| Title: | [●] | |
[BOXL Registration Rights Agreement – Company Signature Page]
IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.
Name of Holder: |
|
| Signature of Authorized Signatory of Holder: | |
| Name of Authorized Signatory: | |
| Title of Authorized Signatory: | |
| Email Address of Authorized Signatory: |
[BOXL Registration Rights Agreement – Holder Signature Page]
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:
| ● | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; | |
| ● | 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; | |
| ● | purchases by a broker-dealer as principal and resale by the broker-dealer for its account; | |
| ● | an exchange distribution in accordance with the rules of the applicable exchange; | |
| ● | privately negotiated transactions; | |
| ● | settlement of short sales; | |
| ● | 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; | |
| ● | through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; | |
| ● | a combination of any such methods of sale; or | |
| ● | any other method permitted pursuant to applicable law. |
Annex 2.1.1 - 1
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 Class A 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 Class A 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 2.1.1 - 2
Annex 2.1.2
SELLING STOCKHOLDERS
The Conversion Shares and the shares of Class A Common Stock issuable under the ELOC being offered by the selling stockholders are those issuable to the selling stockholders upon conversion of the Preferred Stock previously issued to the selling stockholder and pursuant to the ELOC. For additional information regarding the issuance of the Preferred Stock and the entrance into the ELOC, see “Private Placement” above. We are registering the Class A Common Stock in order to permit the selling stockholders to offer the Class A Common Stock issuable upon the conversion of the Preferred Stock and pursuant to the ELOC for resale from time to time. Except for the ownership of the Preferred Stock and the entrance into the ELOC, 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 Class A Common Stock by each of the selling stockholders. The second column lists the number of Class A Common Stock beneficially owned by each selling stockholder, based on its ownership of the Class A Common Stock, as of [●], 2026, assuming full conversion of the Preferred Stock held by the selling stockholders on that date, without regard to any limitations on conversion. The third column lists the Class A Common Stock being offered by this prospectus by the selling stockholders. The fourth column assumes the sale of all of the Class A Common Stock offered by the selling stockholders pursuant to this prospectus.
In accordance with the terms of a registration rights agreement with the selling stockholders, this prospectus generally covers the resale of the maximum number of Class A Common Stock issuable to the Selling Stockholders upon the conversion of the Preferred Stock and the issuance of Class A Common Stock under the ELOC, in each case issued or issuable to the selling stockholders in the “Private Placement” and the related equity line of credit described above.
Under the terms of the Certificate of Designation, a selling stockholder may not convert the Preferred Stock to the extent such conversion would cause such selling stockholder, together with its affiliates and attribution parties, to beneficially own a number of shares of Class A Common Stock which would exceed 4.99% of our then outstanding Class A Common Stock following such conversion, excluding for purposes of such determination shares of Class A Common Stock issuable upon the conversion of the Preferred Stock that have not been converted. The numbers of Class A Common Stock in the second and fourth columns do not reflect this limitation. Similarly, under the terms of the ELOC, a selling stockholder may not be issued shares of Class A Common Stock thereunder to the extent such issuance would cause such selling stockholder, together with its affiliates and attribution parties, to beneficially own a number of shares of Class A Common Stock which would exceed 4.99% of our then outstanding Class A Common Stock following such issuance. The selling stockholders may sell all, some or none of their Class A Common Stock in this offering. See “Plan of Distribution.”
Name of Selling Stockholder |
Number of Class A Common Stock Beneficially Owned Prior to Offering | Maximum Number of Class A Common Stock to be Sold Pursuant to this Prospectus | Number of Class A Common Stock Beneficially Owned After Offering | |||
Annex 2.1.2 - 1
Annex 3.1
BOXLIGHT CORPORATION
Selling Stockholder Notice and Questionnaire
The undersigned beneficial owner of Class A Common Stock (the “Registrable Securities”) of Boxlight Corporation, a Nevada 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.
| (a) | Full Legal Name of Selling Stockholder | |
| (b) | Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities are held: | |
| (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): | |
2. Address for Notices to Selling Stockholder:
|
Telephone: |
| Email: |
| Contact Person: |
3. Broker-Dealer Status:
| (a) | Are you a broker-dealer? | |
| Yes ☐ No ☐ | ||
| (b) | If “yes” to Section 3(a), did you receive your Registrable Securities as compensation for investment banking services to the Company? | |
| Yes ☐ No ☐ | ||
| Note: | If “no” to Section 3(b), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement. | |
| (c) | Are you an affiliate of a broker-dealer? | |
| Yes ☐ No ☐ | ||
| (d) | 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? | |
| Yes ☐ No ☐ | ||
| Note: | 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.
| 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 Securities Purchase Agreement. | ||
| (a) | Type and Amount of other securities beneficially owned by the Selling Stockholder: | |
5. Relationships with the Company:
| 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. | ||
| State any exceptions here: | ||
The undersigned agrees to promptly notify the Company of any 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: |
Beneficial Owner: | ||
| By: | |||
| Name: | |||
| Title: | |||
PLEASE EMAIL A .PDF COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE TO [●], WITH A COPY TO [●].
Exhibit 10.4
BOXLIGHT CORPORATION
LOCK-UP AGREEMENT
August 5, 2026
Boxlight Corporation
2750 Premiere Parkway, Suite 900
Duluth, Georgia 30097
Ladies and Gentlemen:
The undersigned understands that Boxlight Corporation, a Nevada corporation (the “Company”), entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) on August 5, 2026 with each purchaser (each, a “Purchaser”, and collectively “Purchasers”) identified on the signature page of the Securities Purchase Agreement, providing for the private placement (the “Transaction”) of shares of the Company’s Series D Convertible Preferred Stock (the “Preferred Stock”) convertible into shares of Class A common stock, $0.0001 par value per share, of the Company (“Shares”), and that in connection therewith, the Company expects to enter into a registration rights agreement with the Purchasers.
To induce the Company to continue its efforts in connection with the Transaction, the undersigned hereby irrevocably enters into this Lock-Up Agreement (this “Agreement”) and agrees that the undersigned will not, during the period commencing on the date hereof and ending on the date that is one hundred and eighty (180) calendar days after the Closing Date (as defined in the Securities Purchase Agreement) (the “Lock-Up Period”), (1) offer, pledge, sell, contract to sell, grant, lend, or otherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares, whether now owned or hereafter acquired by the undersigned (or any Affiliate (as defined in Rule 405 promulgated under the Securities Act of 1933, as amended) of the undersigned) or with respect to which the undersigned (or any Affiliate of the undersigned) has or hereafter acquires the power of disposition (collectively, the “Lock-Up Securities”); (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Lock-Up Securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Lock-Up Securities, in cash or otherwise; (3) make any demand for or exercise any right with respect to the registration of any Lock-Up Securities; or (4) publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement relating to any Lock-Up Securities.
Notwithstanding the foregoing, and subject to the conditions below, the undersigned may transfer Lock-Up Securities in connection with any of the following:
| 1. | transfers of Lock-Up Securities as a bona fide gift, by will or intestacy or to a family member or trust for the benefit of the undersigned (for purposes of this Agreement, “family member” means any relationship by blood, marriage or adoption, not more remote than first cousin) |
| 2. | provided that the transferee agrees to sign and deliver a lock-up agreement substantially in the form of this Agreement for the balance of the Lock-Up Period. |
| 3. | transfers of Lock-Up Securities to a charity or educational institution. |
| 4. | if the undersigned is a corporation, partnership, limited liability company or other business entity, (i) any transfers of Lock-Up Securities to another corporation, partnership or other business entity that controls, is controlled by or is under common control with the undersigned or (ii) distributions of Lock-Up Securities to members, partners, shareholders, subsidiaries or Affiliates of the undersigned as of the date of this Agreement, provided that the transferee agrees to sign and deliver a lock-up agreement substantially in the form of this Agreement for the balance of the Lock-Up Period. |
| 5. | if the undersigned is a trust, to a trustee or beneficiary of the trust provided that in the case of any transfer pursuant to Sections 1, 2, 3 or this section: |
5.1. any such transfer shall not involve a disposition for value,
5.2. each transferee shall sign and deliver to the Company a lock-up agreement substantially in the form of this Agreement and
5.3. no filing under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or other public announcement shall be required or shall be voluntarily made during the Lock-Up Period.
| 6. | the receipt by the undersigned from the Company of Shares upon the vesting of restricted share awards or share units or upon the exercise of options to purchase the Shares issued under an equity incentive plan of the Company or an employment arrangement (the “Plan Shares”) or the transfer or withholding of Shares or any securities convertible into Shares to the Company upon a vesting event of the Company’s securities or upon the exercise of options to purchase the Company’s securities, in each case on a “cashless” or “net exercise” basis or to cover tax obligations of the undersigned in connection with such vesting or exercise provided that if the undersigned is required to file a report under Section 13 of the Exchange Act reporting a reduction in beneficial ownership of Shares during the Lock-Up Period, the undersigned shall include a statement in such schedule or report to the effect that the purpose of such transfer was to cover tax withholding obligations of the undersigned in connection with such vesting or exercise and, provided further that the Plan Shares shall be subject to the terms of this Agreement. |
| 7. | the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of Lock-Up Securities provided that (i) such plan does not provide for the transfer of Lock-Up Securities during the Lock-Up Period and (ii) no filing under Section 13 of the Exchange Act or any other public announcement shall be required or voluntarily made during the Lock-Up Period. |
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| 8. | the transfer of Lock-Up Securities that occurs by operation of law, such as pursuant to a qualified domestic order or in connection with a divorce settlement, provided that the transferee agrees to sign and deliver a lock-up agreement substantially in the form of this Agreement for the balance of the Lock-Up Period, and provided further that any filing under Section 13 of the Exchange Act that is required to be made during the Lock-Up Period as a result of such transfer shall include a statement that such transfer has occurred by operation of law; and provided further that competent legal counsel for the Company shall have first advised that such transfer is a mandatory and not voluntary transfer. |
| 9. | the transfer of Lock-Up Securities pursuant to a bona fide third party tender offer, merger, consolidation or other similar transaction made to all holders of the Shares involving a change of control (as defined below) of the Company after the closing of the Transaction and approved by the Company’s board of directors; provided that in the event that the tender offer, merger, consolidation or other such transaction is not completed, the Lock-Up Securities owned by the undersigned shall remain subject to the restrictions contained in this Agreement. A “change of control” shall mean the consummation of any bona fide third party tender offer, merger, amalgamation, consolidation or other similar transaction the result of which is that any “person” (as defined in Section 13(d)(3) of the Exchange Act), or group of persons, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 of the Exchange Act) of a majority of total voting power of the voting shares of the Company. |
The undersigned acknowledges, agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s Lock-Up Securities except in compliance with this Agreement.
This Agreement may not be amended or otherwise modified in any respect without the written consent of each of the Company and the undersigned. This Agreement shall be governed by and construed in accordance with the law of the State of Nevada without regard to the principles of conflicts of law thereof. Each of the Company and the undersigned agrees that all legal proceedings concerning this Agreement shall be commenced exclusively by arbitration administered by Mediation and Civil Arbitration, Inc. d/b/a RapidRuling (www.rapidruling.com) in accordance with its Commercial Arbitration Rules effective at the time a claim is made (the “Rules”), and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. Arbitrators shall be appointed by RapidRuling. The place of arbitration shall be New York, New York, and any hearing shall be held via video or telephone conference. The Company and the undersigned agree that no objection shall be taken to the decision, order or award of the tribunal following any such hearing on the basis that the hearing was held by video or telephone conference. The Company and the undersigned consent to electronic service of process, with service to be made to the Company’s and the undersigned’s respective email addresses set forth in the Securities Purchase Agreement. The Company and the undersigned are responsible to check their “SPAM” and “junk” type incoming messages on a daily basis. In any such arbitration award, the arbitrator shall require the breaching party (if any), as finally determined by the arbitrator, to pay the non-breaching party’s costs and expenses (including such nonbreaching party’s reasonable attorneys’ fees, arbitration costs, court costs, and other expenses) associated with enforcing this Agreement and collecting any judgment related thereto. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement.
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The undersigned agrees and understands that this Agreement does not intend to create any relationship between the undersigned and any Purchaser and that no Purchaser is entitled to cast any votes on the matters herein contemplated and that no issuance or sale of the Securities is created or intended by virtue of this Agreement.
The undersigned understands that the Company is relying upon this Agreement in proceeding toward consummation of the Transaction. The undersigned further understands that this Agreement is irrevocable and shall be binding upon the undersigned’s heirs, legal representative, successors and assigns. 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 provisions hereof be enforced by, any other person or entity.
The undersigned understands that, if the Securities Purchase Agreement is not executed by August 12, 2026 or if the Securities Purchase Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Preferred Stock to be sold thereunder, then this Agreement shall be void and of no further force or effect.
Whether or not the Transaction actually occurs depends on a number of factors, including market conditions. Any Transaction will only be made pursuant to the Securities Purchase Agreement.
[BOXL Lock-Up Agreement Signature Page Follows]
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[BOXL Lock-Up Agreement Signature Page]
The undersigned has read and agrees to be bound by the terms of this Agreement dated as of August 5, 2026.
| Very truly yours, | ||
| (Signature) | ||
| Name: | ||
| Address: | ||
| Email: | ||
5
Exhibit 10.5
EQUITY PURCHASE AGREEMENT
THIS EQUITY PURCHASE AGREEMENT (this “Agreement”) is entered into as of August 5, 2026 (the “Execution Date”), by and between Boxlight Corporation, a Nevada corporation (the “Company”), and [ ] (the “Investor”).
RECITALS
WHEREAS, the parties desire that, upon the terms and subject to the conditions contained herein, the Company shall issue and sell to the Investor, from time to time as provided herein, and the Investor shall purchase from the Company up to Fifteen Million U.S. Dollars (US$15,000,000.00) of the Company’s Class A Common Stock (as defined below);
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 the Investor hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1 RECITALS. The parties acknowledge and agree that the recitals set forth above are true and correct and are hereby incorporated in and made a part of this Agreement.
Section 1.2 DEFINED TERMS. As used in this Agreement, the following terms shall have the following meanings specified or indicated (such meanings to be equally applicable to both the singular and plural forms of the terms defined):
“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.
“Agreement” shall have the meaning specified in the preamble hereof.
“Available Amount” means, initially, the Maximum Commitment Amount, which amount shall be reduced by the Investment Amount following each successful Closing, each time the Investor purchases Put Shares.
“Average Daily Trading Volume” shall mean the average trading volume of the Class A Common Stock on the applicable Trading Days.
“Bankruptcy Law” means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors.
“Beneficial Ownership Limitation” shall have the meaning specified in Section 7.1(g).
“Claim Notice” shall have the meaning specified in Section 9.3(a).
“Class A Common Stock” means the Class A common stock of the Company, having a par value per share of US$0.0001, and any shares of any other class of Class A common stock of the Company whether now or hereafter authorized, having the right to participate in the distribution of dividends (as and when declared) and assets (upon liquidation of the Company).
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“Clearing Costs” shall mean all of the Investor’s broker fees, trading commissions, and Transfer Agent fees.
“Clearing Date” shall be the date on which the Investor receives the Put Shares as DWAC Shares in its brokerage account.
“Closing” shall mean one of the closings of a purchase and sale of Class A Common Stock pursuant to Section 2.3.
“Closing Date” shall mean the date of any Closing hereunder.
“Commitment Period” shall mean the period commencing on the Execution Date, and ending on the earlier of: (i) the date on which the Investor shall have purchased Put Shares pursuant to this Agreement equal to the Maximum Commitment Amount; (ii) the date that is thirty-six (36) months after the Execution Date; or (iii) written notice of termination by the Investor to the Company pursuant to Section 6.1 or Section 10.6.
“Commitment Shares” means Class A Common Stock issued by the Company to the Investor pursuant to Section 6.4 (including, for the avoidance of doubt, any True-Up Commitment Shares).
“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Class A 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, Class A Common Stock.
“Company” shall have the meaning specified in the preamble to this Agreement.
“Company Termination Notice” shall have the meaning specified in Section 10.6.
“Confidential Information” means any information disclosed by either party to this Agreement, or their Affiliates, agents or representatives, to the other party to this Agreement, either directly or indirectly, in writing, orally or by inspection of tangible objects (including, without limitation, documents, formulae, business information, trade secrets, technology, strategies. prototypes, samples, plant and equipment), which may or may not be designated as “Confidential,” “Proprietary” or some similar designation. Information communicated orally shall be considered Confidential Information. Confidential Information may also include information disclosed by third parties. Confidential Information shall not, however, include any information which (i) was publicly known and made generally available in the public domain prior to the time of disclosure by the disclosing party; (ii) becomes publicly known and made generally available after disclosure by the disclosing party to the receiving party through no fault, action or inaction of the receiving party; (iii) is already in the possession of the receiving party at the time of disclosure by the disclosing party as shown by the receiving party’s files and records immediately prior to the time of disclosure; (iv) is obtained by the receiving party from a third party without a breach of such third party’s obligations of confidentiality; (v) is independently developed by the receiving party without use of or reference to the disclosing party’s Confidential Information, as shown by documents and other competent evidence in the receiving party’s possession; or (vi) is required by law to be disclosed by the receiving party, provided that the receiving party gives the disclosing party prompt written notice of such requirement prior to such disclosure and assistance in obtaining an order protecting the information from public disclosure.
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“Current Report” shall have the meaning set forth in Section 6.3.
“Custodian” means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.
“Damages” shall mean any loss, claim, damage, liability, cost and expense (including, without limitation, reasonable attorneys’ fees and disbursements and costs and expenses of expert witnesses and investigation).
“Dispute Period” shall have the meaning specified in Section 9.3(a).
“Disqualification Event” shall have the meaning specified in Section 4.27.
“DTC” shall mean The Depository Trust Company, or any successor performing substantially the same function for the Company.
“DTC/FAST Program” shall mean the DTC’s Fast Automated Securities Transfer Program.
“DWAC” shall mean Deposit Withdrawal at Custodian as defined by the DTC.
“DWAC Eligible” shall mean that (a) the Class A Common Stock are eligible at DTC for full services pursuant to DTC’s operational arrangements, including, without limitation, transfer through DTC’s DWAC system, (b) the Company has been approved (without revocation) by the DTC’s underwriting department, (c) the Transfer Agent is approved as an agent in the DTC/FAST Program, (d) the Commitment Shares or Put Shares, as applicable, are otherwise eligible for delivery via DWAC, and (e) the Transfer Agent does not have a policy prohibiting or limiting delivery of the Put Shares or Commitment Shares, as applicable, via DWAC.
“DWAC Shares” means Class A Common Stock that are (i) issued in electronic form, (ii) freely tradable and transferable and without restriction on resale and (iii) timely credited by the Company to the Investor’s or its designee’s specified DWAC account with DTC under the DTC/FAST Program, or any similar program hereafter adopted by DTC performing substantially the same function.
“Eligible Market” means the Principal Market or any nationally recognized exchange upon which the Class A Common Stock are listed.
“Environmental Laws” shall have the meaning set forth in Section 4.14.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exchange Cap” shall mean the maximum aggregate number of shares of Class A Common Stock that the Company may issue and sell pursuant to this Agreement (including, without limitation, all Put Shares and all Commitment Shares), when aggregated with any other shares of Class A Common Stock required to be aggregated therewith under the applicable rules of the Principal Market, without breaching the Company’s obligations under the rules and regulations of the Principal Market, which number shall not exceed 19.99% of the total number of shares of Class A Common Stock issued and outstanding immediately prior to the Execution Date (subject to appropriate adjustment for any stock split, stock dividend, stock combination, recapitalization or other similar transaction); provided, however, that the Exchange Cap shall not apply to any issuance from and after the date on which the Company obtains Stockholder Approval, and shall not apply to the extent that the applicable rules of the Principal Market otherwise permit the issuance of shares of Class A Common Stock in excess of such amount without Stockholder Approval.
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“Execution Date” shall have the meaning set forth in the preamble to this Agreement.
“Facility” shall mean the equity line of credit facility established pursuant to this Agreement, under which the Company may sell, and the Investor shall purchase, up to the Maximum Commitment Amount of Class A Common Stock.
“FINRA” shall mean the Financial Industry Regulatory Authority, Inc.
“Indemnified Party” shall have the meaning specified in Section 9.2.
“Indemnifying Party” shall have the meaning specified in Section 9.2.
“Indemnity Notice” shall have the meaning specified in Section 9.3(b).
“Intellectual Property” shall mean all trademarks, trademark applications, trade names, service marks, service mark registrations, service names, patents, patent applications, patent rights, copyrights, inventions, licenses, approvals, government authorizations, trade secrets or other intellectual property rights.
“Intraday Purchase Price” shall mean ninety-five percent (95%) of the lowest traded price of the Class A Common Stock on the Principal Market during the Intraday Valuation Period.
“Intraday Put” shall mean the right of the Company to require the Investor to purchase Class A Common Stock at the Intraday Purchase Price, subject to the terms and conditions of this Agreement.
“Intraday Put Notice” shall mean a written notice, substantially in the form of Exhibit B hereto, addressed to the Investor and setting forth the amount of Put Shares which the Company requests the Investor to purchase in an Intraday Put (which shall not exceed the Maximum Intraday Put Amount) pursuant to the terms of this Agreement.
“Intraday Valuation Period” shall mean the period beginning at the time that is ten (10) minutes after the time (rounded up to the nearest full minute) of the email confirmation from the Investor of its acceptance of such Intraday Put Notice (“Intraday Valuation Period Start Time”), and ending at the later to occur of (i) expiration of thirty (30) minutes after the Intraday Valuation Period Start Time and (ii) the time when the aggregate trading volume during one or more Trading Days since the Intraday Valuation Period Start Time equals or exceeds one thousand percent (1,000%) of the number of Put Shares purchased by the Investor pursuant to the relevant Intraday Put Notice, as the case may be, but in no event later than the same time of day as the Intraday Valuation Start Time on the fifteenth (15th) Trading Day after the Intraday Valuation Start Time.
“Intraday Valuation Period Start Time” shall have the meaning specified in the definition of Intraday Valuation Period.
“Investment Amount” shall mean the U.S. dollar value equal to the amount of Put Shares referenced in the Put Notice multiplied by the Purchase Price.
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“Investor” shall have the meaning specified in the preamble to this Agreement.
“Issuer Covered Person” shall have the meaning specified in Section 4.27.
“Lien” means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or any other restriction.
“Material Adverse Effect” shall mean any effect on the business, operations, properties, or financial condition of the Company and/or the Subsidiaries that is material and adverse to the Company and/or the Subsidiaries and/or any condition, circumstance, or situation that would prohibit or otherwise materially interfere with the ability of the Company and/or the Subsidiaries to enter into and/or perform its obligations under any Transaction Document and which shall be deemed to include any investigation of the Company, its directors or its officers by the SEC.
“Maximum Commitment Amount” shall mean Fifteen Million U.S. Dollars (US$15,000,000.00).
“Maximum Intraday Put Amount” shall mean 4.99% of the number of Class A Common Stock outstanding on the date of delivery of the applicable Intraday Put Notice. The Maximum Intraday Put Amount may be waived by the Investor in its sole discretion.
“Maximum Regular Put Amount” shall mean the lesser of: (i) one hundred percent (100%) of the Average Daily Trading Volume over the five (5) Trading Days preceding the applicable Put Date; (ii) thirty percent (30%) of the daily trading volume on the applicable Put Date; and (iii) the quotient obtained by dividing (x) Five Hundred Thousand U.S. Dollars (US$500,000) by (y) the closing price of the Class A Common Stock on the applicable Put Date (in each case to be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or similar transaction during the applicable period). The Maximum Regular Put Amount may be waived by the Investor in its sole discretion.
“Person” shall mean an individual, a corporation, a partnership, an association, a trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
“Principal Market” shall mean The Nasdaq Capital Market, provided however, that in the event the Class A Common Stock are ever listed or traded on the NYSE American, the Nasdaq Global Select Market, the Nasdaq Global Market, or the New York Stock Exchange, then the “Principal Market” shall mean such other market or exchange on which the Class A Common Stock are then listed or traded to the extent such other market or exchange is the principal trading market or exchange for the Class A Common Stock.
“Purchase Price” shall mean either the Regular Purchase Price or the Intraday Purchase Price, as applicable.
“Put” shall mean either a Regular Put or an Intraday Put.
“Put Date” shall mean any Trading Day during the Commitment Period that a Put Notice is deemed delivered pursuant to Section 2.1(c) or delivered pursuant to Section 2.2(a).
“Put Notice” shall mean either a Regular Put Notice or an Intraday Put Notice.
“Put Shares” shall mean all Class A Common Stock issued, or that the Company shall be entitled to issue, per any applicable Put Notice in accordance with the terms and conditions of this Agreement.
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“Registration Rights Agreement” means that agreement in the form attached hereto as Exhibit C.
“Registration Statement” shall have the meaning specified in Section 6.3.
“Regular Purchase Price” shall mean ninety-five percent (95%) of the lowest daily VWAP of the Class A Common Stock on the Principal Market during the Regular Valuation Period.
“Regular Put” shall mean the right of the Company to require the Investor to purchase Class A Common Stock at the Regular Purchase Price, subject to the terms and conditions of this Agreement.
“Regular Put Notice” shall mean a written notice, substantially in the form of Exhibit A hereto, addressed to the Investor and setting forth the amount of Put Shares which the Company intends to require the Investor to purchase in a Regular Put (which shall not exceed the Maximum Regular Put Amount unless otherwise waived by the Investor) pursuant to the terms of this Agreement.
“Regular Put Notice Delivery Window” shall have the meaning specified in Section 2.1(c).
“Regular Valuation Period” shall mean the period of three (3) consecutive Trading Days immediately following the applicable Put Date for a Regular Put.
“Regulation D” shall mean Regulation D promulgated under the Securities Act.
“Rule 144” shall mean Rule 144 promulgated under the Securities Act or any similar provision then in force under the Securities Act.
“Rule 144 Eligible” shall have the meaning specified in Section 6.4(b).
“Rules” shall have the meaning specified in Section 10.2.
“SEC” or “Commission” shall mean the United States Securities and Exchange Commission.
“SEC Documents” shall have the meaning specified in Section 4.5.
“Securities” means, collectively, the Put Shares and the Commitment Shares.
“Securities Act” shall mean the Securities Act of 1933, as amended.
“Securities Purchase Agreement” means that certain Securities Purchase Agreement, dated as of August 5, 2026, by and among the Company and the purchasers party thereto.
“Share Delivery Deadline” shall mean either the Regular Share Delivery Deadline or the Intraday Share Delivery Deadline.
“Short Sales” shall mean all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act or any hedging transaction that establishes a net short position with respect to the Class A Common Stock.
“Standstill Period” shall have the meaning specified in Section 6.13.
“Stockholder Approval” shall mean such approval of the stockholders of the Company as may be required by the applicable rules and regulations of the Principal Market (including, without limitation, Nasdaq Listing Rule 5635(d)) (i) to permit the Company to permit the Investor to acquire shares of Class A Common Stock upon conversion of the Preferred Stock (as defined in the Securities Purchase Agreement) and pursuant to this Agreement in excess of the Exchange Cap, (ii) to increase the number of its authorized Class A Common Stock as and when needed to satisfy its obligations under the Transaction Documents; and (iii) to effect one or more reverse stock splits of its issued and outstanding Class A Common Stock (at a ratio of up to five hundred-to-one (500:1)) as and when determined by the Board of Directors, in each case in accordance with the Company’s articles of incorporation and bylaws and applicable Nevada law.
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“Subsidiary” or “Subsidiaries” means any Person the Company wholly-owns or controls, or in which the Company, directly or indirectly, owns a majority of the voting stock or similar voting interest, in each case that would be disclosable pursuant to Item 601(b)(21) of Regulation S-K promulgated under the Securities Act.
“Third Party Claim” shall have the meaning specified in Section 9.3(a).
“Trading Day” means any full trading day (beginning at 9:30 a.m., New York City time, and ending at 4:00 p.m., New York City time) on the Principal Market or, if the Class A Common Stock are then listed on an Eligible Market, on such Eligible Market.
“Transaction Documents” shall mean this Agreement, the Certificate of Designation (as defined in the Securities Purchase Agreement), the Registration Rights Agreement, the Securities Purchase Agreement, the Transfer Agent Instruction Letter, the Lock-Up Agreements (as defined in the Securities Purchase Agreement), the Escrow Agreement (as defined in the Securities Purchase Agreement) and all schedules and exhibits hereto and thereto.
“Transfer Agent” shall mean VStock Transfer, LLC, the current transfer agent of the Company, with a mailing address of 18 Lafayette Place, Woodmere, New York 11598, and any successor transfer agent of the Company.
“Transfer Agent Instruction Letter” means the letter from the Company to the Transfer Agent which instructs the Transfer Agent to issue the Put Shares and the Commitment Shares pursuant to the Transaction Documents, in the form of Exhibit D attached hereto.
“Triggering Event” shall mean the occurrence of any of the following: (a) the failure of the Company to obtain the Stockholder Approval as and when required; (b) the failure of the Company to reserve and keep available the number of shares of Class A Common Stock required to be reserved under the Certificate of Designation or under any other Transaction Document; or (c) any material breach or default by the Company under any Transaction Document (other than this Agreement) that has not been cured within any applicable notice or cure period.
“Valuation Period” shall mean either the Regular Valuation Period or the Intraday Valuation Period, as applicable.
“Variable Rate Transaction” shall have the meaning specified in Section 6.10.
“VWAP” means, for the Class A Common Stock as of any Trading Day, the U.S. dollar volume-weighted average price for the Class A Common Stock on the Principal Market (or, if the Class A Common Stock is then listed on an Eligible Market, on such Eligible Market) during the period beginning at 9:30 a.m., New York City time, or such other time publicly announced by the Principal Market (or by such Eligible Market, as applicable) as the official open (or commencement) of trading on the Principal Market (or on such Eligible Market, as applicable) on such Trading Day, and ending at 4:00 p.m., New York City time, or such other time publicly announced by the Principal Market (or by such Eligible Market, as applicable) as the official close of trading on the Principal Market (or on such Eligible Market, as applicable) on such Trading Day, as reported by Bloomberg, L.P. (or, if not reported on Bloomberg, L.P., another reporting service reasonably agreed to by the parties). All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction during such period.
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ARTICLE II
PURCHASE AND SALE OF CLASS A COMMON STOCK
Section 2.1 REGULAR PUTS.
(a) Subject to the terms and conditions set forth herein (including, without limitation, the provisions of Article VII), the Company shall have the right, but not the obligation, from time to time during the Commitment Period, to direct the Investor to process a Regular Put by its delivery to the Investor of a Regular Put Notice to purchase Put Shares, provided that notwithstanding any other terms of this Agreement, in each instance unless waived by the Investor in its sole discretion (i) the Put Shares are not more than the Maximum Regular Put Amount for any Regular Put; (ii) the aggregate Investment Amount of all Puts (including such Regular Put) shall not exceed the Maximum Commitment Amount; and (iii) all Put Shares resulting from prior submitted Put Notices for all Puts have been delivered.
(b) At any time and from time to time during the Commitment Period, except as provided in this Agreement, the Company may cause a Regular Put by delivering a Regular Put Notice to the Investor via email, subject to satisfaction of the conditions set forth in Section 2.1, Section 7.1 and otherwise provided in this Agreement. The Company shall deliver, or cause to be delivered, the Put Shares as DWAC Shares to the Investor as required pursuant to Section 2.3(a).
(c) A Regular Put Notice shall be deemed delivered on a Trading Day if it is received by e-mail by the Investor if such notice is received on or after 4:00 p.m. New York City time and prior to 6:30 p.m. New York City time on such Trading Day (“Regular Put Notice Delivery Window”). If a Regular Put Notice is not received by the Investor during a Regular Put Notice Delivery Window, the Regular Put Notice will be deemed withdrawn, unless the Investor waives this requirement in writing (including by e-mail).
(d) If the closing price of the Class A Common Stock on the Principal Market (or on such Eligible Market, as applicable) on the Trading Day the Put Notice is received is less than US$1.00 per share, the Regular Put Notice will be deemed withdrawn, unless the Investor waives this requirement in writing (including by e-mail).
(e) The Purchase Price of the Put Shares purchased by the Investor pursuant to each Regular Put Notice shall be the Regular Purchase Price.
Section 2.2 INTRADAY PUTS.
(a) Subject to the terms and conditions set forth herein (including, without limitation, the provisions of Article VII), after delivery of a Regular Put Notice and prior to the end of the associated Regular Valuation Period, the Company may deliver to the Investor one or more Intraday Put Notices. Each Intraday Put Notice shall be subject to the Investor’s written acceptance and the terms, and subject to the conditions that, notwithstanding any other terms of this Agreement, in each instance unless waived by the Investor in its sole discretion: (i) the Intraday Put Shares are not more than the Maximum Intraday Put Amount for any Intraday Put; (ii) the aggregate Investment Amount of all Puts (including such requested Intraday Put) shall not exceed the Maximum Commitment Amount and (iii) all Put Shares resulting from prior submitted Put Notices for all Puts have been delivered.
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(b) The Company may cause an Intraday Put by delivering an Intraday Put Notice to the Investor by email to the Investor prior to 4:00 p.m. (New York City time) on the applicable Trading Day, which notice shall state a number of additional Put Shares (“Intraday Put Shares”) that the Company desires to sell to the Investor on that same Trading Day and request the Investor’s acceptance of an Intraday Put to be executed and priced in accordance with this Section 2.2(d), subject to satisfaction of the conditions set forth in Section 2.2, Section 7.1 and otherwise provided in this Agreement. The Company shall deliver, or cause to be delivered, the Put Shares as DWAC Shares to the Investor as required pursuant to Section 2.3(a).
(c) The Investor shall use reasonable best efforts to provide its acceptance or rejection of an Intraday Put Notice by email to the Company within thirty (30) minutes following the Investor’s receipt of such Intraday Put Notice. If the Company does not receive acceptance or rejection from the Investor of an Intraday Put Notice within such 30-minute period, such Intraday Put Notice shall be deemed rejected. For clarity, the Company may issue, and the Investor may accept, multiple Intraday Put Notices during a Trading Day.
(d) The Purchase Price of the Put Shares purchased by the Investor pursuant to each Intraday Put Notice shall be the Intraday Purchase Price.
Section 2.3 CLOSINGS.
(a) TIMING. (i) The Clearing Date of a Regular Put shall occur on the Trading Day following the delivery of the applicable Regular Put Notice in accordance with Section 2.1(c). On the Clearing Date, the Company shall deliver, or cause to be delivered the applicable Put Shares as DWAC Shares to the Investor no later than 9:30 a.m. (New York City Time) (the “Regular Share Delivery Deadline”). The Closing of a Regular Put shall occur two (2) Trading Days following the end of the Regular Valuation Period. In addition, on or prior to any such Closing or on the date of the delivery of the applicable Regular Put Notice, as required pursuant to Section 7.1, each of the Company and the Investor shall deliver to each other all documents, instruments and writings required to be delivered or reasonably requested by either of them pursuant to this Agreement in order to implement and effect the transactions contemplated herein
(ii) With respect to an Intraday Put accepted by the Investor pursuant to Section 2.2(b), the Company will deliver the relevant Transfer Agent Instruction Letter as promptly as practicable following its receipt of the Investor’s acceptance of the relevant Intraday Put Notice, with a copy to the Investor by email; the Company will use all commercially reasonable efforts to cause the Transfer Agent to deliver email confirmation to the Investor’s broker, with the Investor copied on such email, that the Transfer Agent is processing for issuance such Intraday Put Shares within one (1) hour following its receipt of such acceptance, and the “Intraday Share Delivery Deadline” shall be the time that is two (2) hours after the Investor’s receipt of confirmation from the Transfer Agent that it has received the relevant Transfer Agent Instruction Letter, rounded up to the nearest full minute.
(iii) In addition to any other rights available to the Investor, if the Company fails to cause the Transfer Agent to transmit the Put Shares pursuant to a Put Notice before the applicable Share Delivery Deadline, the Investor may elect to deem such Put Notice rescinded.
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(iv) Payment of the Investment Amount minus the Clearing Costs related to any applicable Put Notice shall be made by the Investor by wire transfer of immediately available funds to an account designated by the Company not later than two (2) Trading Days following the end of the applicable Valuation Period, as may be adjusted for any credit of a Cover Price available to the Investor in accordance with Section 2.3(b).
(b) COMPENSATION FOR FAILURE TO TIMELY DELIVER PUT SHARES. In addition to any other rights available to the Investor, if the Company fails to cause the Transfer Agent to transmit the Put Shares pursuant to the applicable Put Notice before the applicable Share Delivery Deadline, and if after such Share Delivery Deadline the Investor purchases (in an open market transaction or otherwise) Class A Common Stock to deliver in satisfaction of a sale by the Investor of such Put Shares that the Investor anticipated receiving from the Company in respect of such applicable Put Notice, then the Company shall, within two (2) Trading Days after the Investor’s request, which such request shall be made within two (2) Trading Days following the Share Delivery Deadline, either (i) pay cash to the Investor in an amount equal to the Investor’s total purchase price (including brokerage commissions, if any) for the Class A Common Stock so purchased (the “Cover Price”), at which point the Company’s obligation to deliver such Put Shares shall terminate, (ii) promptly honor its obligation to deliver to the Investor such Put Shares as DWAC Shares and pay cash to the Investor in an amount equal to the excess (if any) of the Cover Price over the total Investment Amount paid by the Investor in connection with such applicable Put Notice, or (iii) be deemed to have accepted notice that such Cover Price shall be credited as the Investment Amount to be paid in respect of one or more subsequent Put Notices, in the discretion of the Investor. The Investor shall provide the Company with written notice indicating the amounts payable to the Investor in respect of the Cover Price and evidence of the amount of such amounts payable. Nothing herein shall limit the Investor’s right to pursue a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver Class A Common Stock in connection with a Put Notice.
(c) RETURN OF SURPLUS. If the value of the Put Shares delivered to the Investor causes the Company to exceed the Maximum Commitment Amount, then the Investor shall return to the Company the surplus amount of Put Shares associated with such Put (to the extent such shares have not yet been sold by the Investor), and the Purchase Price with respect to such Put shall be reduced by any Clearing Costs incurred related to the return of such Put Shares. To the extent any such surplus Put Shares have been sold prior to such return request, the Investor shall remit to the Company the net sale proceeds of such surplus shares, less any Clearing Costs.
(d) RESALES DURING VALUATION PERIOD. The parties acknowledge and agree that during any Regular Valuation Period or Intraday Valuation Period, the Investor may contract for, or otherwise effect, the resale of the subject purchased Put Shares to third parties, and shall be solely responsible for its own compliance with applicable securities laws in connection with such resales.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF INVESTOR
The Investor represents and warrants to the Company that as of the Execution Date, each date a Put Notice is submitted and at each Closing Date:
Section 3.1 INTENT. The Investor is entering into this Agreement and acquiring the Securities for its own account, for investment purposes and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered under or exempt from the registration requirements of the Securities Act; provided, however, that by making the representations herein, the Investor does not agree, or make any representation or warranty, to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with, or pursuant to, a registration statement filed pursuant to the Registration Rights Agreement or an applicable exemption under the Securities Act. The Investor does not presently have any agreement or understanding, directly or indirectly, with any Person to sell or distribute any of the Securities.
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Section 3.2 NO LEGAL ADVICE FROM THE COMPANY. The Investor acknowledges that it has had the opportunity to review this Agreement and the transactions contemplated by this Agreement with its own legal counsel and investment and tax advisors. Except with respect to the representations, warranties and covenants contained in this Agreement, the Investor is relying solely on such counsel and advisors and not on any statements or representations of the Company or any of its representatives or agents for legal, tax or investment advice with respect to this investment, the transactions contemplated by this Agreement or the securities laws of any jurisdiction.
Section 3.3 ACCREDITED INVESTOR. The Investor is an accredited investor as defined in Rule 501(a) of Regulation D, and the Investor has such experience in business and financial matters that it is capable of evaluating the merits and risks of an investment in the Securities. The Investor acknowledges that an investment in the Securities is speculative and involves a high degree of risk.
Section 3.4 AUTHORITY. The Investor has the requisite power and authority to enter into and perform its obligations under this Agreement and the other Transaction Documents and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the other Transaction Documents and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action and no further consent or authorization of the Investor is required. Each Transaction Document to which it is a party has been duly executed by the Investor, and when delivered by the Investor in accordance with the terms hereof, will constitute the valid and binding obligation of the Investor enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application.
Section 3.5 NOT AN AFFILIATE. To the Investor’s knowledge after due inquiry, the Investor is not an officer, director or Affiliate of the Company.
Section 3.6 ORGANIZATION AND STANDING. The Investor is an entity duly formed, validly existing and in good standing under the laws of the jurisdiction of its formation with full right, limited liability company power and authority to enter into and to consummate the transactions contemplated by this Agreement and the other Transaction Documents.
Section 3.7 ABSENCE OF CONFLICTS. The execution and delivery of this Agreement and the other Transaction Documents, and the consummation of the transactions contemplated hereby and thereby and compliance with the requirements hereof and thereof, will not (a) violate any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on the Investor, (b) violate any provision of any indenture, instrument or agreement to which the Investor is a party or is subject, or by which the Investor or any of its assets is bound, or conflict with or constitute a material default thereunder, (c) result in the creation or imposition of any lien pursuant to the terms of any such indenture, instrument or agreement, or constitute a breach of any fiduciary duty owed by the Investor to any third party, or (d) require the approval of any third-party (that has not been obtained) pursuant to any material contract, instrument, agreement, relationship or legal obligation to which the Investor is subject or to which any of its assets, operations or management may be subject.
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Section 3.8 DISCLOSURE; ACCESS TO INFORMATION. The Investor had an opportunity to review copies of the SEC Documents filed on behalf of the Company and has had access to all publicly available information with respect to the Company; provided, however, that the Investor makes no representation or warranty hereunder with respect to any SEC Document and is relying on the representations and warranties of the Company in Article IV with respect to the SEC Documents.
Section 3.9 MANNER OF SALE. At no time was the Investor presented with or solicited by or through any leaflet, public promotional meeting, television advertisement or any other form of general solicitation or advertisement regarding the Securities.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Investor that, except as set forth in the disclosure schedules hereto that as of the Execution Date, each date a Put Notice is submitted and at each Closing Date:
Section 4.1 ORGANIZATION OF THE COMPANY. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Nevada, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. 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. Each of the Company and the Subsidiaries is not in violation or default of any of the provisions of its respective 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, could not have or reasonably be expected to result in 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.
Section 4.2 AUTHORITY. The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and the other Transaction Documents. The execution and delivery of this Agreement and 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 corporate action and no further consent or authorization of the Company or its board of directors or stockholders is required. Each of this Agreement and the other Transaction Documents has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application.
Section 4.3 CAPITALIZATION. As of the Execution Date, the authorized capital stock of the Company is expected to be as set forth on Schedule 4.3. Except as set forth in the SEC Documents or on Schedule 4.3, the Company has not issued any capital stock since the date of 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 option plans, the issuance of Class A Common Stock to employees pursuant to the Company’s employee stock purchase 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. 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 in the SEC Documents or on Schedule 4.3, and except as a result of the purchase and sale of the Securities, 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 Class A Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional Class A Common Stock or Common Stock Equivalents. The issuance and sale of the Securities will not obligate the Company to issue Class A Common Stock or other securities to any Person (other than the Investor) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such 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.
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Section 4.4 LISTING AND MAINTENANCE REQUIREMENTS. The Class A Common Stock are 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 Class A Common Stock under the Exchange Act, nor has the Company received any notification that the SEC is contemplating terminating such registration. The Company has not, in the twelve (12) months preceding the Execution Date, received notice from the Principal Market to the effect that the Company is not in compliance with the listing or maintenance requirements of such Principal Market. The Company is, and, except as set forth in Schedule 4.4, has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements.
Section 4.5 SEC DOCUMENTS; DISCLOSURE. 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 one (1) year preceding the Execution Date (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 Documents”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Documents prior to the expiration of any such extension. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and other federal laws, rules and regulations applicable to such SEC Documents, and none of the SEC Documents 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 light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Documents comply as to form and substance in all material respects with applicable accounting requirements and the published rules and regulations of the SEC or other applicable rules and regulations with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis during the periods involved (except (a) as may be otherwise indicated in such financial statements or the notes thereto or (b) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of 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). The Company maintains a system of internal accounting controls appropriate for its size. There is no transaction, arrangement, or other relationship between the Company and an unconsolidated or other off balance sheet entity that is not disclosed by the Company in its financial statements or otherwise that would be reasonably likely to have a Material Adverse Effect. 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 the Investor or its agents or counsel with any information that it believes constitutes or might constitute material, non- public information. The Company understands and confirms that the Investor will rely on the foregoing representation in effecting transactions in securities of the Company.
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Section 4.6 VALID ISSUANCES. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be validly issued, fully paid, and non-assessable (which means that no further sums are required to be paid by the holders thereof in connection with the issue thereof), free and clear of all Liens imposed by the Company, other than restrictions on transfer provided for in the Transaction Documents and under the Securities Act.
Section 4.7 NO CONFLICTS. To the knowledge of the Company, the execution, delivery and performance of this Agreement and the other Transaction Documents by the Company, and the consummation by the Company of the transactions contemplated hereby and thereby, including, without limitation, the issuance of the Put Shares and the Commitment Shares, do not and will not: (a) result in a violation of the Company’s or any Subsidiary’s articles of incorporation, bylaws or other organizational or charter documents, (b) conflict with, or constitute a material default (or an event that with notice or lapse of time or both would become a material 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, acceleration or cancellation of, any agreement, indenture, instrument or any “lock-up” or similar provision of any underwriting or similar agreement to which the Company or any Subsidiary is a party, or (c) result in a violation of any federal, state or local law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to the Company or any Subsidiary or by which any property or asset of the Company or any Subsidiary is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect), nor is the Company otherwise in violation of, conflict with or in default under any of the foregoing. The business of the Company is not being conducted in violation of any law, ordinance or regulation of any governmental entity. The Company is not required under federal, state or local law, rule or regulation to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under this Agreement or the other Transaction Documents (other than any SEC, FINRA or state securities filings that may be required to be made by the Company in connection with the issuance of the Commitment Shares or subsequent to any Closing or any registration statement that may be filed pursuant hereto); provided that, for purposes of the representation made in this sentence, the Company is assuming and relying upon the accuracy of the relevant representations and agreements of Investor herein.
Section 4.8 NO MATERIAL ADVERSE CHANGE. No event has occurred that would have a Material Adverse Effect on the Company or any Subsidiary that has not been disclosed in subsequent SEC filings.
Section 4.9 LITIGATION AND OTHER PROCEEDINGS. To the knowledge of the Company, there are no actions, suits, investigations, inquiries or proceedings pending or threatened against or affecting the Company, any Subsidiary or any of their respective properties, nor has the Company received any written or oral notice of any such action, suit, proceeding, inquiry or investigation, which would have a Material Adverse Effect or would require disclosure under the Securities Act or the Exchange Act. No judgment, order, writ, injunction or decree or award has been issued by or, to the knowledge of the Company, requested of any court, arbitrator or governmental agency which would have a Material Adverse Effect. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the SEC involving the Company, any Subsidiary, or any current or former director or officer of the Company or any Subsidiary.
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Section 4.10 REGISTRATION RIGHTS. Except as set forth in the SEC Documents, no Person (other than the Investor) has any right to cause the Company to effect the registration under the Securities Act of any securities of the Company or any Subsidiary.
Section 4.11 INVESTOR’S STATUS. The Company acknowledges and agrees that the Investor is acting solely in the capacity of arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby. The Company further acknowledges that the Investor is not 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 hereby and thereby and any advice given by the Investor or any of its representatives or agents in connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to the Investor’s purchase of the Securities. The Company further represents to the Investor that the Company’s decision to enter into the Transaction Documents has been based solely on the independent evaluation by the Company and its representatives and advisors.
Section 4.12 NO GENERAL SOLICITATION; NO INTEGRATED OFFERING. Neither the Company, any Subsidiary, nor any of their respective Affiliates, nor any Person acting on their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with the offer or sale of the Securities. Neither the Company, any Subsidiary, nor any of their respective Affiliates, nor any Person acting on 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 require registration of the offer and sale of any of the Securities under the Securities Act, whether through integration with prior offerings or otherwise.
Section 4.13 INTELLECTUAL PROPERTY RIGHTS. To the knowledge of the Company, the Company and each Subsidiary own or possess adequate rights or licenses to use all material trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and rights necessary to conduct their respective businesses as now conducted. None of the Company’s, nor any Subsidiary’s Intellectual Property has expired or terminated, or, by the terms and conditions thereof, could expire or terminate within three years from the date of this Agreement if such expiration or termination could reasonably be expected to have a Material Adverse Effect. The Company does not have any knowledge of any infringement by the Company and/or any Subsidiary of any material Intellectual Property of others, or of any such development of similar or identical trade secrets or technical information by others, and there is no claim, action or proceeding being made or brought against, or to the Company’s knowledge, being threatened against, the Company and/or any Subsidiary regarding the infringement of any Intellectual Property, which could reasonably be expected to have a Material Adverse Effect.
Section 4.14 ENVIRONMENTAL LAWS. To the Company’s knowledge, the Company and each Subsidiary (i) is in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) has received all permits, licenses or other approvals required of it under applicable Environmental Laws to conduct its respective businesses and (iii) is in compliance with all terms and conditions of any such permit, license or approval, except where, in each of the three foregoing clauses, the failure to so comply could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
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Section 4.15 TITLE. Except as disclosed in the SEC Documents, to the knowledge of the Company, the Company and each Subsidiary has good and marketable title in fee simple to all real property owned by it and good and marketable title in all personal property owned by it that is material to the business of the Company and each Subsidiary, in each case free and clear of all Liens and, except for 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 or any Subsidiary and Liens for the payment of federal, state or other taxes, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company or any Subsidiary is held under valid, subsisting and enforceable leases with which the Company is in compliance with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company or any Subsidiary.
Section 4.16 INSURANCE. The Company and each Subsidiary is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and each Subsidiary is engaged. Neither the Company, nor any Subsidiary has been refused any insurance coverage sought or applied for, and the Company has no reason to believe that it or any Subsidiary 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 at a cost that would not materially and adversely affect the condition, financial or otherwise, or the earnings, business or operations of the Company, taken as a whole.
Section 4.17 REGULATORY PERMITS. The Company and each Subsidiary possesses all material certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct its businesses, and neither the Company, nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit.
Section 4.18 TAX STATUS. The Company and each Subsidiary has made or filed all federal and state income and all other material tax returns (or extensions thereof), reports and declarations required by any jurisdiction to which it is subject (unless and only to the extent that the Company has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported taxes) and 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, except those being contested in good faith and has set aside on its books provision reasonably adequate for the payment of all 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 know of no basis for any such claim.
Section 4.19 TRANSACTIONS WITH AFFILIATES. Except as set forth in the SEC Documents, 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, 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 or partner, in each case in excess of the lesser of (i) US$120,000 or (ii) one percent of the average of the Company’s total assets at year end for the last two completed fiscal years, other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company or any Subsidiary and (iii) other employee benefits, including stock option agreements under any stock option plan of the Company.
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Section 4.20 APPLICATION OF TAKEOVER PROTECTIONS. The Company and its board of directors have taken or will take prior to the Execution Date 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 articles of incorporation or bylaws of the Company or the laws of the State of Nevada which is or could become applicable to the Investor as a result of the transactions contemplated by this Agreement, including, without limitation, the Company’s issuance of the Securities and the Investor’s ownership of the Securities.
Section 4.21 FOREIGN CORRUPT PRACTICES. Neither the Company, any Subsidiary, nor to the knowledge of the Company, 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 the Foreign Corrupt Practices Act of 1977, as amended.
Section 4.22 SARBANES-OXLEY. The Company is in compliance with all provisions of the Sarbanes-Oxley Act of 2002, as amended, which are applicable to it.
Section 4.23 CERTAIN FEES. No brokerage or finder’s fees or commissions are or will be payable by the Company 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 Investor shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of any Persons for fees of a type contemplated in this Section 4.23 that may be due in connection with the transactions contemplated by the Transaction Documents.
Section 4.24 INVESTMENT COMPANY. The Company is not an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
Section 4.25 ACCOUNTANTS. The Company’s accountants are set forth in the SEC Documents and, to the knowledge of the Company, such accountants are an independent registered public accounting firm as required by the Securities Act.
Section 4.26 NO MARKET MANIPULATION. Neither the Company, nor any Subsidiary has, and to its knowledge no Person acting on either of their 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.
Section 4.27 NO DISQUALIFICATION EVENTS. None of the Company, any Subsidiary, any of their predecessors, any affiliated issuer, any director, executive officer, other officer of the Company or any Subsidiary participating in the offering contemplated hereby, 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”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3) under the Securities Act. The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event.
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Section 4.28 MONEY LAUNDERING. The Company and each Subsidiary is in compliance with, and has not previously violated, the USA PATRIOT ACT of 2001 and all other applicable U.S. and non-U.S. anti-money laundering laws and regulations, including, but not limited to, the laws, regulations and Executive Orders and sanctions programs administered by the U.S. Office of Foreign Assets Control, including, but not limited, to (i) Executive Order 13224 of September 23, 2001 entitled, “Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism” (66 Fed. Reg. 49079 (2001)); and (ii) any regulations contained in 31 CFR, Subtitle B, Chapter V.
Section 4.29 ILLEGAL OR UNAUTHORIZED PAYMENTS; POLITICAL CONTRIBUTIONS. Neither the Company, nor any Subsidiary has, nor, to the best of the Company’s knowledge (after reasonable inquiry of its officers and directors), any of the officers, directors, employees, agents or other representatives of the Company, any Subsidiary or any other business entity or enterprise with which the Company is or has been affiliated or associated, has, directly or indirectly, made or authorized any payment, contribution or gift of money, property, or services, whether or not in contravention of applicable law, (a) as a kickback or bribe to any Person or (b) to any political organization, or the holder of or any aspirant to any elective or appointive public office except for personal political contributions not involving the direct or indirect use of funds of the Company.
Section 4.30 SHELL COMPANY STATUS. The Company is not, and has never been, an issuer of the kind described in Rule 144(i)(1) under the Securities Act. The Company is subject to the reporting requirements of Section 13 of the Exchange Act, and has filed all reports and other materials required to be filed by it under the Exchange Act.
Section 4.31 ABSENCE OF SCHEDULES. In the event that on the Execution Date, the Company does not deliver any disclosure schedule contemplated by this Agreement, the Company hereby acknowledges and agrees that (i) each such undelivered disclosure schedule shall be deemed to read as follows: “Nothing to Disclose”, and (ii) the Investor has not otherwise waived delivery of such disclosure schedule.
Section 4.32 NO TRIGGERING EVENT. No Triggering Event has occurred and is continuing.
ARTICLE V
COVENANTS OF INVESTOR
Section 5.1 CERTAIN TRANSACTIONS AND CONFIDENTIALITY. The Investor, covenants that neither it, nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any Short Sales of any of the Company’s securities during the period commencing with the execution of this Agreement and ending on the date on which the Facility is no longer outstanding (i.e., the Maximum Commitment Amount has been purchased or this Agreement has otherwise been terminated in accordance with its terms). For the purposes hereof, and in accordance with Regulation SHO, the sale after delivery of a Put Notice of such number of shares of Class A Common Stock reasonably expected to be purchased under a Put Notice shall not be deemed a Short Sale. The Investor, covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the Current Report (as defined in Section 6.3), such Investor will maintain the confidentiality of the existence and terms of this transaction. Notwithstanding the foregoing and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) the Investor does not make 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 disclosed pursuant to the Current Report, (ii) the Investor shall not 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 disclosed pursuant to the Current Report and (iii) the Investor shall not 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, agents or Affiliates after the filing of the Current Report
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ARTICLE VI
COVENANTS OF THE COMPANY
Section 6.1 LISTING OF CLASS A COMMON STOCK. The Company shall promptly secure the listing of all of the Put Shares and Commitment Shares to be issued to the Investor hereunder on the Principal Market (subject to official notice of issuance) and shall use its best efforts to maintain, so long as the Class A Common Stock shall be so listed, the listing of all such Put Shares and Commitment Shares from time to time issuable hereunder. The Company shall use best efforts to continue the listing and trading of the Class A Common Stock on the Principal Market (including, without limitation, maintaining sufficient net tangible assets) and will comply in all respects with the Company’s reporting, filing and other obligations under its organizational documents and the rules of the Principal Market. The Company shall not take any action that would reasonably be expected to result in the delisting or suspension of the Class A Common Stock on the Principal Market. The Company shall promptly, and in no event later than the following Trading Day after receiving such notice, provide to the Investor copies of any notices it receives from any Person regarding the continued eligibility of the Class A Common Stock for listing on the Principal Market. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 6.1. The Company shall take all action necessary to ensure that the Class A Common Stock can be transferred electronically as DWAC Shares. If the Company receives a final non-appealable delisting notice from the Principal Market or if the Class A Common Stock fail to be listed on an Eligible Market, then the Investor may terminate its obligations under this Agreement by written notice to the Company and may deem any outstanding Put Notice as withdrawn.
Section 6.2 OTHER EQUITY LINES. So long as this Agreement remains in effect, the Company covenants and agrees that it will not enter into any other equity line of credit agreement with any other party, without the Investor’s prior written consent, which consent may be granted or withheld in the Investor’s sole and absolute discretion.
Section 6.3 FILING OF CURRENT REPORT AND REGISTRATION STATEMENT. The Company agrees that it shall file a Current Report on Form 8-K, including certain Transaction Documents as exhibits thereto, with the SEC within the time required by the Exchange Act, relating to the transactions contemplated by, and describing the material terms and conditions of, such Transaction Documents (the “Current Report”). The Company shall permit the Investor to review and comment upon the pre-filing draft version of the Current Report at least two (2) Trading Days prior to its filing with the SEC and the Company shall give reasonable consideration to all such comments. The Investor shall use its reasonable best efforts to comment upon the pre-filing draft version of the Current Report within one (1) Trading Day from the date the Investor receives it from the Company. The Company shall also file with the SEC a new registration statement on Form S-1 (the “Registration Statement”), the timing and terms of which shall be governed by Section 2 of the Registration Rights Agreement.
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Section 6.4 COMMITMENT FEE; ISSUANCE OF COMMITMENT SHARES; FAILURE TO INCLUDE IN REGISTRATION STATEMENT.
(a) In consideration for the Investor’s execution and delivery of, and performance under, this Agreement, the Company shall pay to the Investor a commitment fee equal to US$150,000 (the “Commitment Fee”), which shall be paid in a single installment in the form of Class A Common Stock. All Class A Common Stock issued by the Company to the Investor under this Section 6.4 shall be referred to as “Commitment Shares.” The Commitment Fee shall be fully earned as of the Execution Date, and the Commitment Shares shall be issued and delivered to the Investor on the Closing Date (as defined in the Securities Purchase Agreement). The number of Commitment Shares to be issued to the Investor on the Closing Date shall be equal to the quotient obtained by dividing (a) US$150,000 by (b) the Nasdaq Official Closing Price of the Class A Common Stock on the Execution Date (the “Initial Commitment Share Reference Price”). The Investor may, at its option, elect to receive in lieu of any or all of the Commitment Shares (including True-Up Commitment Shares, as defined below) pre-funded warrants to purchase an equal number of shares of Class A Common Stock exercisable at US$0.0001 per share, permitting cashless (net) exercise and with no termination date, and in form and substance reasonably acceptable to the Investor (the “Pre-Funded Warrants”). (To the extent that the Investor receives Pre-Funded Warrants pursuant to this Section, the term “Commitment Shares” as used in this Agreement and the Registration Rights Agreement shall include the shares issuable upon exercise of such Pre-Funded Warrants.)
(b) Upon the earlier of (i) the Commitment Shares becoming eligible for resale pursuant to Rule 144 under the Securities Act (“Rule 144 Eligible”) or (ii) the effectiveness of the Registration Statement covering the resale of the Commitment Shares, if the True-Up Commitment Share Reference Price is less than the Initial Commitment Share Reference Price (in each case, as appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or similar transaction occurring in the interim), the Company shall immediately issue and deliver to the Investor such number of additional Commitment Shares (the “True-Up Commitment Shares”) as is necessary so that the aggregate number of Commitment Shares issued in respect of the Commitment Fee equals the quotient obtained by dividing US$150,000 by the True-Up Commitment Share Reference Price. For purposes hereof, the “True-Up Commitment Share Reference Price” means the Nasdaq Official Closing Price of the Class A Common Stock on the effectiveness date of the Registration Statement (or, if the initial Commitment Shares become Rule 144 Eligible prior to such effectiveness, on the date on which the initial Commitment Shares become Rule 144 Eligible).
(c) For the avoidance of doubt, the Commitment Fee and the Commitment Shares shall be fully earned as of the Execution Date, and the issuance of the Commitment Shares is not contingent upon any other event or condition, including, without limitation, the effectiveness of the Registration Statement or the Company’s submission of a Put Notice to the Investor, and is irrespective of any termination of this Agreement.
(d) To the extent that the issuance of Commitment Shares to the Investor would exceed the Beneficial Ownership Limitation as set forth in Section 7.1(g), the Investor shall be issued pre-funded warrants to purchase the number of Class A Common Stock by which the Commitment Shares otherwise to be issued would exceed such limitation.
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(e) On the Execution Date, the Company shall deliver to the Transfer Agent the Transfer Agent Instruction Letter duly executed by the Company and the Transfer Agent. The Company and the Investor agree (i) that the Investor may issue one or more Notices of Issuance (as defined in the Transfer Agent Instruction Letter) instructing the Transfer Agent to issue to the Investor True-Up Commitment Shares due to the Investor, provided that all Notices of Issuance in the aggregate do not exceed the total number of True-Up Commitment Shares calculated as set forth above, and (ii) that all calculations by the Investor of the number of True-Up Commitment Shares to be issued shall be deemed correct absent manifest error.
(f) The Company shall include in the Registration Statement filed with the SEC all Commitment Shares, provided that, in addition to all other remedies at law or in equity or otherwise under this Agreement, failure to do so (except pursuant to objection by the SEC) will result in liquidated damages of US$100,000.00, being immediately due and payable to the Investor at its election in the form of cash payment and the Investor may terminate its obligations under this Agreement by written notice to the Company.
Section 6.5 DUE DILIGENCE; CONFIDENTIALITY; NON-PUBLIC INFORMATION. The Investor shall have the right, from time to time as the Investor may reasonably deem appropriate, to perform reasonable due diligence on the Company during normal business hours. The Company, each Subsidiary and their respective officers and employees shall provide information and reasonably cooperate with the Investor in connection with any reasonable request by the Investor related to the Investor’s due diligence of the Company. The Company agrees not to disclose any Confidential Information of the Investor to any third party, except for attorneys, accountants, advisors who have a need to know such Confidential Information and are bound by confidentiality, and shall not use any Confidential Information for any purpose other than in connection with, or in furtherance of, the transactions contemplated hereby. The Company acknowledges that the Confidential Information of the Investor shall remain the property of the Investor and agrees that it shall take all reasonable measures to protect the secrecy of any Confidential Information disclosed by the Investor. The Company confirms that neither it nor any other Person acting on its behalf shall provide the Investor or its agents or counsel with any information that constitutes or might constitute material, non-public information, unless a simultaneous public announcement thereof is made by the Company in the manner contemplated by Regulation FD. In the event of a breach of the foregoing covenant by the Company or any Person acting on its behalf (as determined in the reasonable good faith judgment of the Investor), in addition to any other remedy provided herein or in the other Transaction Documents, the Investor, upon the advice of its counsel, shall have the right to make a public disclosure, in the form of a press release, public advertisement or otherwise, of such material, non-public information without the prior approval by the Company; provided the Investor shall have first provided notice to the Company that it believes it has received information that constitutes material, non-public information, and the Company shall have had at least twenty-four (24) hours to publicly disclose such material, non-public information prior to any such disclosure by the Investor, and the Company shall have failed to publicly disclose such material, non-public information within such time period. The Investor shall not have any liability to the Company, any Subsidiary, or any of their respective directors, officers, employees, stockholders, Affiliates or agents, for any such disclosure. The Company understands and confirms that the Investor shall be relying on the foregoing covenants in effecting transactions in securities of the Company.
Section 6.6 PURCHASE RECORDS. The Company shall maintain records showing the Available Amount at any given time and the date, Investment Amount and Put Shares for each Put, contained in the applicable Put Notice.
Section 6.7 TAXES. The Company shall pay any and all transfer, stamp or similar taxes that may be payable with respect to the issuance and delivery of any Class A Common Stock to the Investor made under this Agreement.
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Section 6.8 USE OF PROCEEDS. The Company will use the net proceeds from the offering of Put Shares hereunder for the purposes described in the Registration Statement.
Section 6.9 OTHER TRANSACTIONS. The Company shall not enter into, announce or recommend to its stockholders any agreement, plan, arrangement or transaction in or of which the terms thereof would restrict, materially delay, conflict with or impair the ability or right of the Company to perform its obligations under the Transaction Documents, including, without limitation, the obligation of the Company to deliver the Put Shares and the Commitment Shares to the Investor in accordance with the terms of the Transaction Documents.
Section 6.10 NO VARIABLE-RATE TRANSACTIONS. Without the prior written consent of the Investor, for so long as the Facility remains outstanding, except for the transactions contemplated under the Transaction Documents, the Company shall not enter into any Variable Rate Transaction or have in force and effect any existing Variable Rate Transaction. For purposes of this Agreement, “Variable Rate Transaction” means a transaction in which the Company (i) issues or sells any equity or debt securities that are convertible into, exchangeable or exercisable for, or include the right to receive additional Class A Common Stock or Common Stock Equivalents either (A) at a conversion price, exercise price, exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the Class A Common Stock at any time after the initial issuance of such equity or debt 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 equity or debt 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 Class A Common Stock (including, without limitation, any “full ratchet” or “weighted average” anti-dilution provisions, but not including any standard anti-dilution protection for any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction), (ii) issues or sells any equity or debt securities, including without limitation, Class A Common Stock or Common Stock Equivalents, either (A) at a 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 Class A Common Stock (other than standard anti-dilution protection for any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction), or (B) that are subject to or contain any put, call, redemption, buy-back, price-reset or other similar provision or mechanism (including, without limitation, a “Black-Scholes” put or call right, other than in connection with a “fundamental transaction”) that provides for the issuance of additional equity securities of the Company or the payment of cash by the Company, or (iii) enters into any agreement, including, but not limited to, an “equity line of credit” (other than with the Investor) or other continuous offering or similar offering of Class A Common Stock or Common Stock Equivalents, whereby the Company may sell Class A Common Stock or Common Stock Equivalents at a future determined price.
Section 6.11 INTEGRATION. In any case subject to the terms of the Registration Rights Agreement, from and after the Execution Date, neither the Company, nor any of its Subsidiaries or Affiliates will, and the Company shall use its reasonable efforts to ensure that no Person acting on their behalf will, directly or indirectly, make any offers or sales of any security or solicit any offers to buy any security, under circumstances that would require registration of the offer and sale of any of the Securities under the Securities Act.
Section 6.12 TRANSACTION DOCUMENTS. On the Execution Date, the Company shall deliver to the Investor executed copies of all of the Transaction Documents.
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Section 6.13 STANDSTILLS. Unless waived by the Investor, notwithstanding any other provisions set forth in the Transaction Documents, the Company hereby covenants and agrees that it shall not issue any Class A Common Stock or Common Stock Equivalents, or enter into any agreement to do so during the following periods (each a “Standstill Period”): (i) beginning upon the submission of any Regular Put Notice that has been accepted in accordance with the terms hereof and ending upon the later of: (A) the Trading Day following the expiration of the Regular Valuation Period applicable to such Regular Put Notice (a “Regular Put Valuation Period Standstill”), and (B) the close of the Trading Day on which the aggregate trading volume of the Class A Common Stock over the Trading Days since issuance of such Regular Put Notice shall have exceeded Five Hundred percent (500%) of the number of Put Shares sold pursuant to such Regular Put Notice (a “Regular Put Minimum Volume Standstill”), and (ii) beginning upon the submission of any Intraday Put Notice that has been accepted in accordance with the terms hereof and ending at the end of the applicable Intraday Valuation Period (an “Intraday Put Valuation Period Standstill”).
Section 6.14 IRREVOCABLE TRANSFER AGENT INSTRUCTIONS. On or prior to the Execution Date, the Company shall deliver to the Transfer Agent the Transfer Agent Instruction Letter, duly executed by the Company, which shall be irrevocable and shall direct the Transfer Agent to issue and deliver the Put Shares and the Commitment Shares to or for the account of the Investor in accordance with the Transaction Documents. The Company hereby irrevocably authorizes and instructs the Transfer Agent, and shall cause the Transfer Agent, to issue and deliver the Put Shares and the Commitment Shares as DWAC Shares upon its receipt of a Notice of Issuance, without any further act, consent, direction or instruction of, or notice to, the Company. In the event the Company fails to timely deliver the Transfer Agent Instruction Letter, or the Transfer Agent fails to issue and deliver any Put Shares or Commitment Shares when required under the Transaction Documents, the Company hereby irrevocably and unconditionally authorizes the Investor (or its designee) to deliver a Notice of Issuance directly to the Transfer Agent on behalf of the Company, and agrees that the Transfer Agent may rely upon, and the Company shall cause the Transfer Agent to honor, any such Notice of Issuance without any further act, consent, direction or instruction of, or notice to, the Company. The Company acknowledges and agrees that the foregoing instructions and authorizations constitute a material inducement to the Investor entering into this Agreement, that the Investor is relying upon them, that they may not be amended, revoked or withdrawn without the prior written consent of the Investor, and that the Company’s breach of this Section 6.14 would cause irreparable harm to the Investor for which a remedy at law would be inadequate; accordingly, the Investor shall be entitled to seek specific performance of, and injunctive relief to enforce, this Section 6.14, without the necessity of posting a bond or other security, in addition to all other remedies available to it at law or in equity.
Section 6.15 STOCKHOLDER APPROVAL; EXCHANGE CAP. Notwithstanding anything in this Agreement to the contrary, the Company shall not issue, and the Investor shall not be entitled to receive or require the issuance of, any shares of Class A Common Stock under this Agreement (including, without limitation, any Put Shares or Commitment Shares) to the extent that, after giving effect to such issuance, the aggregate number of shares of Class A Common Stock issued pursuant to this Agreement would exceed the Exchange Cap, unless and until the Company obtains Stockholder Approval. The Company shall use its reasonable best efforts to obtain Stockholder Approval as promptly as practicable, and, if and to the extent required by the applicable rules of the Principal Market, shall include a proposal to approve the issuance of shares of Class A Common Stock under this Agreement in excess of the Exchange Cap (together with any other matters constituting Required Stockholder Approvals under the Securities Purchase Agreement) at a meeting of the Company’s stockholders held for such purpose. If such Stockholder Approval is not obtained at such meeting, the Company shall cause a meeting of its stockholders to be held to seek such Stockholder Approval as promptly as practicable thereafter, and, if such Stockholder Approval is not then obtained, shall cause an additional meeting of its stockholders to be held to seek such Stockholder Approval every 20 days thereafter, and shall in each case use its best efforts to obtain such Stockholder Approval, until such Stockholder Approval is obtained.
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ARTICLE VII
CONDITIONS TO DELIVERY OF PUT NOTICES AND CONDITIONS TO CLOSING
Section 7.1 CONDITIONS PRECEDENT TO THE OBLIGATION OF INVESTOR TO PURCHASE PUT SHARES. The obligation of the Investor hereunder to purchase Put Shares is subject to the satisfaction of each of the following conditions:
(a) REGISTRATION STATEMENT. The Registration Statement, and any amendment or supplement thereto, shall be and remain effective for the resale by the Investor of the Put Shares and the Commitment Shares and (i) neither the Company nor the Investor shall have received notice that the SEC has issued or intends to issue a stop order with respect to such Registration Statement or that the SEC otherwise has suspended or withdrawn the effectiveness of such Registration Statement, either temporarily or permanently, or intends or has threatened to do so and (ii) no other suspension of the use of, or withdrawal of the effectiveness of, such Registration Statement or related prospectus shall exist. The Company shall have prepared and filed with the SEC a final and complete prospectus (the preliminary form of which shall be included in the Registration Statement) and shall have delivered to the Investor a true and complete copy thereof. Such prospectus shall be current and available for the resale by the Investor of all of the Securities covered thereby.
(b) ACCURACY OF THE COMPANY’S REPRESENTATIONS AND WARRANTIES. The representations and warranties of the Company shall be true and correct in all material respects as of the Execution Date, each date a Put Notice is submitted, and as of the date of each Closing (except for representations and warranties under the first sentence of Section 4.3, which are specifically made as of the Execution Date and shall be true and correct in all respects as of the Execution Date).
(c) PERFORMANCE BY THE COMPANY. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company.
(d) NO INJUNCTION. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or adopted by any court or governmental authority of competent jurisdiction that prohibits or directly and materially adversely affects any of the transactions contemplated by the Transaction Documents, and no proceeding shall have been commenced that may have the effect of prohibiting or materially adversely affecting any of the transactions contemplated by the Transaction Documents.
(e) ADVERSE CHANGES. Since the date of filing of the Company’s most recent SEC Document, no event that had or is reasonably likely to have a Material Adverse Effect has occurred.
(f) NO SUSPENSION OF TRADING IN OR DELISTING OF THE CLASS A COMMON STOCK. Trading of the Class A Common Stock shall not have been suspended by the SEC, the Principal Market or FINRA, or otherwise halted for any reason, and the Class A Common Stock shall have been approved for listing or quotation on and shall not have been delisted from the Principal Market. In the event of a suspension, delisting, or halting for any reason, of the trading of the Class A Common Stock, as contemplated by this Section 7.1(f), while a Regular Put Notice is outstanding, the Investor shall have the right to return to the Company any remaining amount of Put Shares associated with such Put, and the Investment Amount with respect to such Put shall be reduced accordingly. In the event of a suspension, delisting, or halting of the trading of the Class A Common Stock for any time period while an Intraday Put Notice is outstanding, the Investor shall have the right to return to the Company any remaining amount of Put Shares associated with such Intraday Put, and the Investment Amount with respect to such Intraday Put shall be reduced accordingly.
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(g) BENEFICIAL OWNERSHIP LIMITATION. As of the date of the Closing for such issuance and sale, the number of Put Shares to be purchased by the Investor shall not exceed the number of such shares that, when aggregated with all other Class A Common Stock then beneficially owned or deemed beneficially owned by the Investor and its Affiliates, would result in the Investor and its Affiliates owning more than the Beneficial Ownership Limitation (as defined below), as determined in accordance with Section 13(d) of the Exchange Act and the regulations promulgated thereunder. For purposes of this Section 7.1(g), in the event that the amount of Class A Common Stock outstanding, as determined in accordance with Section 13(d) of the Exchange Act and the regulations promulgated thereunder, is greater on a Closing Date than on the date upon which the Put Notice associated with such Closing Date is given, the amount of Class A Common Stock outstanding on such Closing Date shall govern for purposes of determining whether the Investor, when aggregating all purchases of Class A Common Stock made pursuant to this Agreement, would own more than the Beneficial Ownership Limitation following such Closing Date. The “Beneficial Ownership Limitation” shall be 4.99% of the number of Class A Common Stock outstanding immediately after giving effect to the issuance of Class A Common Stock issuable pursuant to a Put Notice. The Investor, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 7.1(g), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of Class A Common Stock outstanding immediately after giving effect to the issuance of Class A Common Stock issuable pursuant to a Put Notice and the provisions of this Section 7.1(g) 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.
(h) NO KNOWLEDGE. The Company shall have no knowledge of any event more likely than not to have the effect of causing the Registration Statement to be suspended or otherwise ineffective (which event is more likely than not to occur within the fifteen (15) Trading Days following the Trading Day on which such Put Notice is deemed delivered). The Company shall have no knowledge of any untrue statement (or alleged untrue statement) of a material fact or omission (or alleged omission) of 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, in the Registration Statement, any effective registration statement filed pursuant to the Registration Rights Agreement or any post-effective amendment or prospectus which is a part of the foregoing, unless the Company has filed an amendment to the Registration Statement or made a filing pursuant to Section 13(a) or 15(d) of the Exchange Act with the SEC.
(i) NO VIOLATION OF STOCKHOLDER APPROVAL REQUIREMENT. The issuance of the Put Shares shall not violate the stockholder approval requirements of the Principal Market, if any.
(j) DWAC ELIGIBLE. The Class A Common Stock must be DWAC Eligible and not subject to a “DTC chill.”
(k) SEC DOCUMENTS. All reports, schedules, registrations, forms, statements, information and other documents required to have been filed by the Company with the SEC pursuant to the reporting requirements of the Exchange Act (other than Current Reports on Form 8-K) shall have been filed with the SEC within the applicable time periods prescribed for such filings under the Exchange Act.
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(l) TRANSFER AGENT INSTRUCTION LETTER. The Transfer Agent Instruction Letter shall have been executed and delivered by the Company to the Transfer Agent and acknowledged and agreed to in writing by the Transfer Agent, and the Company shall have no knowledge of any fact or circumstance that would prevent the Transfer Agent from complying with the terms of the Transfer Agent Instruction Letter.
(m) BROKER APPROVAL. The Put Shares shall have been approved by the Investor’s prime broker or designated clearing firm for deposit to its account with the Depository Trust Company system.
(n) NO VIOLATION. No statute, regulation, order, guidance, decree, writ, ruling or injunction shall have been enacted, entered, promulgated, threatened or endorsed by any federal, state, local or foreign court or governmental authority of competent jurisdiction, including, without limitation, the SEC, which prohibits the consummation of or which would materially modify or delay any of the transactions contemplated by the Transaction Documents.
(o) LEGAL OPINION. The Company shall cause to be delivered to the Investor a written opinion or opinions of counsel reasonably satisfactory to the Investor, in form and substance reasonably satisfactory to the Investor and its counsel, relating to the availability and effectiveness of the Registration Statement, as supplemented by any prospectus supplement or amendment thereto, and regarding the Company’s compliance with the laws of the State of Nevada and the federal securities laws of the United States in the issuance, sale and registration of the Put Shares and Commitment Shares and entrance into the transaction documents.
(p) NO NON-PUBLIC INFORMATION. Neither the Investor nor any of its agents or counsel shall be in possession of any information that constitutes or might constitute material, non-public information with respect to the Company.
(q) COMMITMENT SHARES ISSUED AS DWAC SHARES. Following the effectiveness of the Registration Statement any Class A Common Stock issuable to the Investor pursuant to Section 6.4 shall have been credited by the Transfer Agent to the Investor’s or its designee’s account at DTC as DWAC Shares.
(r) NO TRIGGERING EVENT. No Triggering Event shall have occurred and be continuing.
ARTICLE VIII
LEGENDS
Section 8.1 NO RESTRICTIVE STOCK LEGEND. No restrictive stock legend shall be placed on the share certificates representing the Put Shares.
Section 8.2 INVESTOR’S COMPLIANCE. Nothing in this Article VIII shall affect in any way the Investor’s obligations hereunder to comply with all applicable securities laws upon the sale of the Class A Common Stock.
ARTICLE IX
NOTICES; INDEMNIFICATION
Section 9.1 NOTICES. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be delivered via email (including Put Notices, which shall be delivered in accordance with Sections 2.1 and 2.2), and, unless otherwise specified herein, a supplemental notice may also be (a) personally served, (b) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (c) delivered by a nationally recognized overnight delivery service with charges prepaid, or (d) transmitted by hand delivery, telegram, or e-mail as a PDF, addressed as set forth below or to such other address as such party shall have specified most recently by written notice given in accordance herewith. Any notice or other communication required or permitted to be given hereunder shall be deemed effective upon delivery by e-mail at the e-mail address(es) designated below (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party) on the same day as delivered (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received).
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The addresses for such communications shall be:
If to the Company:
Boxlight Corporation
2750 Premiere Parkway, Suite 900
Duluth, Georgia 30097
Attention: Ryan Zeek, Chief Financial Officer
E-mail: [email protected]
With a copy (which shall not constitute notice) to:
Lucosky Brookman LLP
111 Broadway, Suite 807
New York, New York 10006
Attention: Edward Welch
Email: [email protected]
If to the Investor:
[ ]
With a copy (which shall not constitute notice) to:
Either party hereto may from time to time change its address or e-mail for notices under this Section 9.1 by giving at least ten (10) days’ prior written notice of such changed address to the other party hereto.
Section 9.2 INDEMNIFICATION. The Company (an “Indemnifying Party”) agrees to indemnify and hold harmless the Investor along with its Affiliates and their respective officers, directors, employees, and authorized agents and representatives, and each Person or entity, if any, who controls such party within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act or the rules and regulations thereunder (an “Indemnified Party”) from and against any and all Damages, joint or several, and any and all actions in respect thereof to which the Indemnified Party becomes subject to, resulting from, arising out of or relating to (i) any misrepresentation, breach of warranty or nonfulfillment of or failure to perform any covenant or agreement on the part of the Indemnifying Party contained in this Agreement, (ii) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, any registration statement pursuant to the Registration Rights Agreement or any post-effective amendment thereof or supplement thereto, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, (iii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in the light of the circumstances under which the statements therein were made, not misleading, or (iv) any material violation or alleged material violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation under the Securities Act, the Exchange Act or any state securities law, as such Damages are incurred, except to the extent such Damages result solely from the Indemnified Party’s gross negligence, fraud, or willful misconduct in performing its obligations under this Agreement (in each case as determined by a final non-appealable judgment of a court having jurisdiction over such matter); provided, however, that the foregoing indemnity agreement shall not apply to any Damages of an Indemnified Party to the extent, but only to the extent, (a) arising out of or based upon any untrue statement or alleged untrue statement or omission or alleged omission made by an Indemnifying Party in reliance upon and in conformity with written information furnished to the Indemnifying Party by the Indemnified Party expressly for use in the Registration Statement, or any post-effective amendment thereof or supplement thereto, or (b) resulting from the fraud or willful misconduct of the Indemnified Party (as determined by a final non-appealable judgment of court having jurisdiction over such matter).
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In addition to and without limiting the foregoing, the indemnity provided in this Section 9.2 is intended to, and shall also, cover any action or proceeding instituted against any Indemnified Party in any capacity (including such Indemnified Party’s status as an investor in, or holder of securities of, the Company), or against any of their respective Affiliates, by the Company or by any stockholder of the Company who is not an Affiliate of such Indemnified Party, arising out of or relating to any of the transactions contemplated by the Transaction Documents, and for the avoidance of doubt shall also cover direct claims brought by the Company against any Indemnified Party; provided that such indemnity shall not cover any Damages to the extent finally judicially determined by a court of competent jurisdiction to have resulted from such Indemnified Party’s material breach of the Transaction Documents or from such Indemnified Party’s fraud, gross negligence or willful misconduct. The Company shall reimburse each Indemnified Party promptly, and in any event within five (5) business days following written demand, for all Damages (including reasonable attorneys’ fees and other costs and expenses) as they are incurred in connection with investigating, preparing, pursuing, defending or settling any such action, claim or proceeding, whether or not pending or threatened and whether or not such Indemnified Party is a party thereto; provided that if any Indemnified Party is finally judicially determined not to be entitled to indemnification hereunder, such Indemnified Party shall promptly reimburse the Company for any amounts so advanced. If any Indemnified Party takes any action to enforce the provisions of, or to collect any amounts due under, any Transaction Document, the Company shall pay the reasonable and actual costs and expenses (including attorneys’ fees and disbursements) incurred by such Indemnified Party in connection therewith. The indemnification and payment obligations of the Company under this Section 9.2 shall be in addition to any other liability the Company may otherwise have to any Indemnified Party, shall not be limited by any other provision of the Transaction Documents, and shall remain operative and in full force and effect regardless of any investigation made by or on behalf of any Indemnified Party and regardless of any termination of this Agreement.
Section 9.3 METHOD OF ASSERTING INDEMNIFICATION CLAIMS. All claims for indemnification by any Indemnified Party under Section 9.2 shall be asserted and resolved as follows:
(a) In the event any claim or demand in respect of which an Indemnified Party might seek indemnity under Section 9.2 is asserted against or sought to be collected from such Indemnified Party by a Person other than a party hereto or an Affiliate thereof (a “Third Party Claim”), the Indemnified Party shall deliver a written notification, enclosing a copy of all papers served, if any, and specifying the nature of and basis for such Third Party Claim and for the Indemnified Party’s claim for indemnification that is being asserted under any provision of Section 9.2 against an Indemnifying Party, together with the amount or, if not then reasonably ascertainable, the estimated amount, determined in good faith, of such Third Party Claim (a “Claim Notice”) with reasonable promptness to the Indemnifying Party. If the Indemnified Party fails to provide the Claim Notice with reasonable promptness after the Indemnified Party receives notice of such Third Party Claim, the Indemnifying Party shall not be obligated to indemnify the Indemnified Party with respect to such Third Party Claim to the extent that the Indemnifying Party’s ability to defend has been prejudiced by such failure of the Indemnified Party. The Indemnifying Party shall notify the Indemnified Party as soon as practicable within the period ending fifteen (15) calendar days following receipt by the Indemnifying Party of either a Claim Notice or an Indemnity Notice (as defined below) (the “Dispute Period”) whether the Indemnifying Party disputes its liability or the amount of its liability to the Indemnified Party under Section 9.2 and whether the Indemnifying Party desires, at its sole cost and expense, to defend the Indemnified Party against such Third Party Claim.
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(i) If the Indemnifying Party notifies the Indemnified Party within the Dispute Period that the Indemnifying Party desires to defend the Indemnified Party with respect to the Third Party Claim pursuant to this Section 9.3(a), then the Indemnifying Party shall have the right to defend, with counsel reasonably satisfactory to the Indemnified Party, at the sole cost and expense of the Indemnifying Party, such Third Party Claim by all appropriate proceedings, which proceedings shall be vigorously and diligently prosecuted by the Indemnifying Party to a final conclusion or will be settled at the discretion of the Indemnifying Party (but only with the consent of the Indemnified Party in the case of any settlement that (A) provides for any relief other than the payment of monetary damages, (B) provides for the payment of monetary damages as to which the Indemnified Party shall not be indemnified in full pursuant to Section 9.2, or (C) does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect of such Third Party Claim). The Indemnifying Party shall have full control of such defense and proceedings, including any compromise or settlement thereof; provided, however, that the Indemnified Party may, at the sole cost and expense of the Indemnified Party, at any time prior to the Indemnifying Party’s delivery of the notice referred to in the first sentence of this Section 9.3(b), file any motion, answer or other pleadings or take any other action that the Indemnified Party reasonably believes to be necessary or appropriate to protect its interests; and provided, further, that if requested by the Indemnifying Party, the Indemnified Party will, at the sole cost and expense of the Indemnifying Party, provide reasonable cooperation to the Indemnifying Party in contesting any Third Party Claim that the Indemnifying Party elects to contest. The Indemnified Party may participate in, but not control, any defense or settlement of any Third Party Claim controlled by the Indemnifying Party pursuant to this Section 9.3(b), and except as provided in the preceding sentence, the Indemnified Party shall bear its own costs and expenses with respect to such participation. Notwithstanding the foregoing, the Indemnified Party may take over the control of the defense or settlement of a Third Party Claim at any time if (i) the Indemnifying Party fails to diligently prosecute such defense, (ii) there exists a conflict of interest between the Indemnifying Party and the Indemnified Party with respect to such Third Party Claim, or (iii) the Indemnified Party reasonably determines that the conduct of the defense by the Indemnifying Party could be materially prejudicial to the interests of the Indemnified Party, in each case without waiving any right to indemnity under Section 9.2 with respect to such Third Party Claim.
(ii) If the Indemnifying Party fails to notify the Indemnified Party within the Dispute Period that the Indemnifying Party desires to defend the Third Party Claim pursuant to this Section 9.3(a), or if the Indemnifying Party gives such notice but fails to prosecute vigorously and diligently or settle the Third Party Claim, or if the Indemnifying Party fails to give any notice whatsoever within the Dispute Period, then the Indemnified Party shall have the right to defend, at the sole cost and expense of the Indemnifying Party, the Third Party Claim by all appropriate proceedings, which proceedings shall be prosecuted by the Indemnified Party in a reasonable manner and in good faith or will be settled at the discretion of the Indemnified Party (with the consent of the Indemnifying Party, which consent will not be unreasonably withheld). The Indemnified Party will have full control of such defense and proceedings, including any compromise or settlement thereof; provided, however, that if requested by the Indemnified Party, the Indemnifying Party will, at the sole cost and expense of the Indemnifying Party, provide reasonable cooperation to the Indemnified Party and its counsel in contesting any Third Party Claim which the Indemnified Party is contesting. Notwithstanding the foregoing provisions of this Section 9.3(c), if the Indemnifying Party has notified the Indemnified Party within the Dispute Period that the Indemnifying Party disputes its liability or the amount of its liability hereunder to the Indemnified Party with respect to such Third Party Claim and if such dispute is resolved in favor of the Indemnifying Party in the manner provided in Section 9.3(d) below, the Indemnifying Party will not be required to bear the costs and expenses of the Indemnified Party’s defense pursuant to this Section 9.3(c) or of the Indemnifying Party’s participation therein at the Indemnified Party’s request, and the Indemnified Party shall reimburse the Indemnifying Party in full for all reasonable costs and expenses incurred by the Indemnifying Party in connection with such litigation. The Indemnifying Party may participate in, but not control, any defense or settlement controlled by the Indemnified Party pursuant to this Section 9.3(c), and the Indemnifying Party shall bear its own costs and expenses with respect to such participation.
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(iii) If the Indemnifying Party notifies the Indemnified Party that it does not dispute its liability or the amount of its liability to the Indemnified Party with respect to the Third Party Claim under Section 9.2 or fails to notify the Indemnified Party within the Dispute Period whether the Indemnifying Party disputes its liability or the amount of its liability to the Indemnified Party with respect to such Third Party Claim, the amount of Damages specified in the Claim Notice shall be conclusively deemed a liability of the Indemnifying Party under Section 9.2 and the Indemnifying Party shall pay the amount of such Damages to the Indemnified Party on demand. If the Indemnifying Party has timely disputed its liability or the amount of its liability with respect to such Third Party Claim, the Indemnifying Party and the Indemnified Party shall proceed in good faith to negotiate a resolution of such dispute; provided, however, that if the dispute is not resolved within thirty (30) days after the Claim Notice, the Indemnifying Party shall be entitled to institute such legal action as it deems appropriate.
(b) In the event any Indemnified Party should have a claim under Section 9.2 against the Indemnifying Party that does not involve a Third Party Claim, the Indemnified Party shall deliver a written notification of a claim for indemnity under Section 9.2 specifying the nature of and basis for such claim, together with the amount or, if not then reasonably ascertainable, the estimated amount, determined in good faith, of such claim (an “Indemnity Notice”) with reasonable promptness to the Indemnifying Party. The failure by any Indemnified Party to give the Indemnity Notice shall not impair such party’s rights hereunder except to the extent that the Indemnifying Party demonstrates that it has been irreparably prejudiced thereby. If the Indemnifying Party notifies the Indemnified Party that it does not dispute the claim or the amount of the claim described in such Indemnity Notice or fails to notify the Indemnified Party within the Dispute Period whether the Indemnifying Party disputes the claim or the amount of the claim described in such Indemnity Notice, the amount of Damages specified in the Indemnity Notice will be conclusively deemed a liability of the Indemnifying Party under Section 9.2 and the Indemnifying Party shall pay the amount of such Damages to the Indemnified Party on demand. If the Indemnifying Party has timely disputed its liability or the amount of its liability with respect to such claim, the Indemnifying Party and the Indemnified Party shall proceed in good faith to negotiate a resolution of such dispute; provided, however, that if the dispute is not resolved within thirty (30) days after the Indemnity Notice, either party shall be entitled to institute such legal action as it deems appropriate.
(c) The Indemnifying Party agrees to advance and pay the Indemnified Party, as promptly as possible but in any event within five (5) days as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such claim, regardless of whether the Indemnifying Party has disputed its liability hereunder; provided, however, that in the event it is finally determined by a court of competent jurisdiction that the Indemnifying Party has no liability with respect to such Claim, the Indemnified Party shall promptly reimburse the Indemnifying Party for all amounts so advanced.
(d) The indemnity provisions contained herein shall be in addition to (i) any cause of action or similar rights of the Indemnified Party against the Indemnifying Party or others, and (ii) any liabilities the Indemnifying Party may be subject to.
ARTICLE X
MISCELLANEOUS
Section 10.1 GOVERNING LAW. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Nevada without regard to the principles of conflicts of law (whether of the State of Nevada or any other jurisdiction).
Section 10.2 ARBITRATION. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors, officers, stockholders, employees or agents) shall be commenced exclusively by arbitration be administered by Mediation and Civil Arbitration, Inc. d/b/a RapidRuling (www.rapidruling.com) in accordance with its Commercial Arbitration Rules effective at the time a claim is made (the “Rules”), and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. Arbitrators shall be appointed by RapidRuling. The place of arbitration shall be New York, New York, and any hearing shall be held via video or telephone conference. The parties hereto agree that no objection shall be taken to the decision, order or award of the tribunal following any such hearing on the basis that the hearing was held by video or telephone conference. The parties hereto consent to electronic service of process, with service to be made to the following email addresses the Company: [email protected], with a copy to [email protected], and Investor: [ ]. All such service of process may come from the opposing party’s email listed here, [email protected]. The parties hereto shall list all said email addresses as “safe senders” (or other whitelist) and are responsible to check their “SPAM” and “junk” type incoming messages on a daily basis. In any such arbitration award, the arbitrator shall require the breaching party (if any), as finally determined by the arbitrator, to pay the non-breaching Party’s costs and expenses (including such nonbreaching party’s reasonable attorneys’ fees, arbitration costs, court costs, and other expenses) associated with enforcing the Agreement and collecting any judgment related thereto. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement.
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Section 10.3 JURY TRIAL WAIVER. THE COMPANY AND THE INVESTOR HEREBY WAIVE A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER IN RESPECT OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THE TRANSACTION DOCUMENTS.
Section 10.4 ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the Company and the Investor and their respective successors. Neither this Agreement nor any rights of the Investor or the Company hereunder may be assigned by either party to any other Person; provided, however, that the Investor may assign this Agreement or any of its rights hereunder to any Affiliate of the Investor without the prior written consent of the Company, so long as such assignee agrees in writing to be bound by the terms and conditions of this Agreement.
Section 10.5 NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the benefit of the Company and the Investor and their respective successors, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as set forth in Article IX.
Section 10.6 TERMINATION. This Agreement shall automatically terminate on the earlier of (i) the end of the Commitment Period; or (ii) the date that the Company sells and the Investor purchases the Maximum Commitment Amount. In addition, the Company may terminate this Agreement upon written notice to the Investor; provided, that the Company may not terminate this Agreement pursuant to this sentence unless and until (i) no shares of Preferred Stock remain issued and outstanding and (ii) all Commitment Shares required to be issued hereunder, including all True-Up Commitment Shares, have been issued and delivered to the Investor (or, to the extent the Investor has elected to receive Pre-Funded Warrants in lieu thereof, such Pre-Funded Warrants have been issued and delivered to the Investor). Furthermore, the Investor may terminate this Agreement upon written notice to the Company if, pursuant to or within the meaning of any Bankruptcy Law, the Company commences a voluntary case or any Person commences a proceeding against the Company, a Custodian is appointed for the Company or for all or substantially all of its property or the Company makes a general assignment for the benefit of its creditors. If the Company receives a final, non-appealable delisting notice from the Principal Market or if the Class A Common Stock fails to be listed on an Eligible Market, then the Investor may terminate its obligations under this Agreement by written notice to the Company and may deem any outstanding Put Notice as withdrawn. Notwithstanding the foregoing, in the event of termination of this Agreement, the provisions of Articles III, IV, IX and the agreements and covenants of the Company and the Investor set forth in this Article X shall survive the termination of this Agreement for the maximum length of time allowed under applicable law.
Section 10.7 ENTIRE AGREEMENT. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the Company and the Investor with respect to the matters covered herein and therein 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.
Section 10.8 FEES AND EXPENSES. Except as expressly set forth in the Transaction Documents or any other writing 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. For the avoidance of doubt, the Company shall pay all Transfer Agent fees, Clearing Costs, stamp taxes and other taxes and duties levied in connection with any Securities.
Section 10.9 COUNTERPARTS. This Agreement may be executed in multiple counterparts, each of which may be executed by less than all of the parties and shall be deemed to be an original instrument which shall be enforceable against the parties actually executing such counterparts and all of which together shall constitute one and the same instrument. This Agreement may be delivered to the other parties hereto by e-mail of a copy of this Agreement bearing the signature of the parties so delivering this Agreement.
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Section 10.10 SEVERABILITY. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision; provided that such severability shall be ineffective if it materially changes the economic benefit of this Agreement to any party.
Section 10.11 FURTHER ASSURANCES. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
Section 10.12 NO STRICT CONSTRUCTION. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.
Section 10.13 EQUITABLE RELIEF. Each party acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the other by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, each party acknowledges that the remedy at law for a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by the such party of the provisions of this Agreement, that the other party shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing economic loss and without any bond or other security being required.
Section 10.14 TITLE AND SUBTITLES. The titles and subtitles used in this Agreement are used for the convenience of reference and are not to be considered in construing or interpreting this Agreement.
Section 10.15 AMENDMENTS; WAIVERS. No provision of this Agreement may be amended or waived by the parties from and after the date that is one (1) Trading Day immediately preceding the initial filing of the Registration Statement with the SEC. Subject to the immediately preceding sentence, (i) no provision of this Agreement may be amended other than by a written instrument signed by both parties hereto and (ii) no provision of this Agreement may be waived other than in a written instrument signed by the party against whom enforcement of such waiver is sought. No failure or delay 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
Section 10.16 PUBLICITY. The Company and the Investor shall consult with each other in issuing any press releases or otherwise making public statements with respect to the transactions contemplated hereby and no party shall issue any such press release or otherwise make any such public statement, other than as required by law, without the prior written consent of the other parties, which consent shall not be unreasonably withheld or delayed, except that no prior consent shall be required if such disclosure is required by law, in which such case the disclosing party shall provide the other party with prior notice of such public statement. Notwithstanding the foregoing, the Company shall not publicly disclose the name of the Investor without the prior written consent of the Investor, except to the extent required by law. The Investor acknowledges that this Agreement and all or part of the Transaction Documents may be deemed to be “material contracts,” as that term is defined by Item 601(b)(10) of Regulation S-K, and that the Company may therefore be required to file such documents as exhibits to reports or registration statements filed under the Securities Act or the Exchange Act. The Investor further agrees that the status of such documents and materials as material contracts shall be determined solely by the Company, in consultation with its counsel.
** Signature Page Follows **
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their respective officers thereunto duly authorized as of the Execution Date.
| BOXLIGHT CORPORATION | ||
| By: | ||
| Name: | [●] | |
| Title: | [●] | |
| [ ] | ||
| By: | ||
| Name: | [●] | |
| Title: | [●] | |
** Signature Page to Equity Purchase Agreement **
EXHIBIT A
FORM OF REGULAR PUT NOTICE
TO: [ ]
| DATE:_________________ | REGULAR PUT NOTICE NUMBER:_____________ |
We refer to the Equity Purchase Agreement, dated August 5, 2026 (the “Agreement”), entered into by and between Boxlight Corporation and you. Capitalized terms defined in the Agreement shall, unless otherwise defined herein, have the same meaning when used herein.
We hereby:
| 1) | Notify you that the Maximum Regular Put Amount as of the delivery of this Regular Put Notice is _________. |
| 2) | Give you notice that: |
[___] we require you to purchase Put Shares in an amount equal to _________ , which is not in excess of the Maximum Regular Put Amount; OR
[__] we request that you purchase an amount of Put Shares equal to _________ (the “Excess Purchase Amount”) which is in excess of the Maximum Regular Put Amount
If we have requested that you purchase in excess of the Maximum Regular Put Amount, prior to the opening of trading on the Trading Day immediately following the delivery of this Put Notice please confirm if you will purchase the Maximum Regular Put Amount, the Excess Purchase Amount or some amount of Put Shares between the Maximum Regular Put Amount and the Excess Purchase Amount and what amount. Failure to so confirm will be deemed confirmation that you elect to purchase the Maximum Regular Put Amount.
| 3) | Certify that, as of the date hereof, the conditions set forth in Section 7.1 of the Agreement are satisfied. The representations and warranties of the Company contained in the Agreement are true and correct in all material respects as of the date hereof as though made on and as of such date (except for representations and warranties that speak as of a specific date, which were true and correct in all material respects as of such date. |
| 4) | We will deliver an executed Transfer Agent Instruction Letter to the Transfer Agent promptly upon our receipt of your confirmation of the validity of this Regular Put Notice, and we hereby confirm that the Company has no knowledge of any fact or circumstance that would prevent the Transfer Agent from complying with such Transfer Agent Instruction Letter, once delivered. |
BOXLIGHT CORPORATION
| By: | ||
| Name: | ||
| Title: |
A-1
EXHIBIT B
FORM OF INTRADAY PUT NOTICE
TO: [ ]
| DATE: _________ (the “Trading Day”) | INTRADAY PUT NOTICE NUMBER:_______ |
We refer to the Equity Purchase Agreement, dated August 5, 2026 (the “Agreement”), entered into by and between Boxlight Corporation and you. Capitalized terms defined in the Agreement shall, unless otherwise defined herein, have the same meaning when used herein.
We hereby:
| 1) | Notify you that the Maximum Intraday Put Amount as of the delivery of this Intraday Put Notice is _________. |
| 2) | Request that you accept this Intraday Put Notice pursuant to the terms of Section 2.2(a) of the Agreement; specifically, we request that, prior to the close of this Trading Day, you purchase Intraday Put Shares in an amount equal to _________, to be issued and priced in accordance with the provisions of Section 2.2 of the Agreement. |
| 3) | Certify that this is the ___ Intraday Put Notice submitted to you on this Trading Day, and with respect to all Put Notices, including all Intraday Put Notices, previously submitted by us and accepted by you on this Trading Day, valid instructions have been submitted to the TA for all prior notices. |
| 4) | Certify that, as of the date hereof, the conditions set forth in Section 7.1 of the Agreement are satisfied. We further certify that the representations and warranties of the Company contained in the Agreement are true and correct in all material respects as of the date hereof as though made on and as of such date (except for representations and warranties that speak as of a specific date, which were true and correct in all material respects as of such date. |
| 5) | We will deliver an executed Transfer Agent Instruction Letter to the Transfer Agent promptly upon our receipt of your confirmation of the validity of this Intraday Put Notice, and we hereby confirm that the Company has no knowledge of any fact or circumstance that would prevent the Transfer Agent from complying with such Transfer Agent Instruction Letter, once delivered. |
If we do not receive your acceptance of this Intraday Put Notice within 30 minutes of your receipt hereof, this Intraday Put Notice shall be deemed rejected and of no further force or effect.
BOXLIGHT CORPORATION
| By: | ||
| Name: | ||
| Title: |
B-1
ACCEPTED:
[ ]
| By: | ||
| Name: | ||
| Title: |
B-2
EXHIBIT C
FORM OF REGISTRATION RIGHTS AGREEMENT
C-1
EXHIBIT D
FORM OF TRANSFER AGENT INSTRUCTION LETTER
D-1
Exhibit 10.6
EQUITY PURCHASE AGREEMENT
THIS EQUITY PURCHASE AGREEMENT (this “Agreement”) is entered into as of August 5, 2026 (the “Execution Date”), by and between Boxlight Corporation, a Nevada corporation (the “Company”), and [ ], a Nevada limited liability company (the “Investor”).
RECITALS
WHEREAS, the parties desire that, upon the terms and subject to the conditions contained herein, the Company shall issue and sell to the Investor, from time to time as provided herein, and the Investor shall purchase from the Company up to Fifteen Million U.S. Dollars (US$15,000,000.00) of the Company’s Class A Common Stock (as defined below);
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 the Investor hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1 RECITALS. The parties acknowledge and agree that the recitals set forth above are true and correct and are hereby incorporated in and made a part of this Agreement.
Section 1.2 DEFINED TERMS. As used in this Agreement, the following terms shall have the following meanings specified or indicated (such meanings to be equally applicable to both the singular and plural forms of the terms defined):
“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.
“Agreement” shall have the meaning specified in the preamble hereof.
“Available Amount” means, initially, the Maximum Commitment Amount, which amount shall be reduced by the Investment Amount following each successful Closing, each time the Investor purchases Put Shares.
“Average Daily Trading Volume” shall mean the average trading volume of the Class A Common Stock on the applicable Trading Days.
“Bankruptcy Law” means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors.
“Beneficial Ownership Limitation” shall have the meaning specified in Section 7.1(g).
“Claim Notice” shall have the meaning specified in Section 9.3(a).
“Class A Common Stock” means the Class A common stock of the Company, having a par value per share of US$0.0001, and any shares of any other class of Class A common stock of the Company whether now or hereafter authorized, having the right to participate in the distribution of dividends (as and when declared) and assets (upon liquidation of the Company).
“Clearing Costs” shall mean all of the Investor’s broker fees, trading commissions, and Transfer Agent fees.
“Clearing Date” shall be the date on which the Investor receives the Put Shares as DWAC Shares in its brokerage account.
“Closing” shall mean one of the closings of a purchase and sale of Class A Common Stock pursuant to Section 2.3.
“Closing Date” shall mean the date of any Closing hereunder.
“Commitment Period” shall mean the period commencing on the Execution Date, and ending on the earlier of: (i) the date on which the Investor shall have purchased Put Shares pursuant to this Agreement equal to the Maximum Commitment Amount; (ii) the date that is thirty-six (36) months after the Execution Date; or (iii) written notice of termination by the Investor to the Company pursuant to Section 6.1 or Section 10.6.
“Commitment Shares” means Class A Common Stock issued by the Company to the Investor pursuant to Section 6.4 (including, for the avoidance of doubt, any True-Up Commitment Shares).
“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Class A 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, Class A Common Stock.
“Company” shall have the meaning specified in the preamble to this Agreement.
“Company Termination Notice” shall have the meaning specified in Section 10.6.
“Confidential Information” means any information disclosed by either party to this Agreement, or their Affiliates, agents or representatives, to the other party to this Agreement, either directly or indirectly, in writing, orally or by inspection of tangible objects (including, without limitation, documents, formulae, business information, trade secrets, technology, strategies. prototypes, samples, plant and equipment), which may or may not be designated as “Confidential,” “Proprietary” or some similar designation. Information communicated orally shall be considered Confidential Information. Confidential Information may also include information disclosed by third parties. Confidential Information shall not, however, include any information which (i) was publicly known and made generally available in the public domain prior to the time of disclosure by the disclosing party; (ii) becomes publicly known and made generally available after disclosure by the disclosing party to the receiving party through no fault, action or inaction of the receiving party; (iii) is already in the possession of the receiving party at the time of disclosure by the disclosing party as shown by the receiving party’s files and records immediately prior to the time of disclosure; (iv) is obtained by the receiving party from a third party without a breach of such third party’s obligations of confidentiality; (v) is independently developed by the receiving party without use of or reference to the disclosing party’s Confidential Information, as shown by documents and other competent evidence in the receiving party’s possession; or (vi) is required by law to be disclosed by the receiving party, provided that the receiving party gives the disclosing party prompt written notice of such requirement prior to such disclosure and assistance in obtaining an order protecting the information from public disclosure.
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“Current Report” shall have the meaning set forth in Section 6.3.
“Custodian” means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.
“Damages” shall mean any loss, claim, damage, liability, cost and expense (including, without limitation, reasonable attorneys’ fees and disbursements and costs and expenses of expert witnesses and investigation).
“Dispute Period” shall have the meaning specified in Section 9.3(a).
“Disqualification Event” shall have the meaning specified in Section 4.27.
“DTC” shall mean The Depository Trust Company, or any successor performing substantially the same function for the Company.
“DTC/FAST Program” shall mean the DTC’s Fast Automated Securities Transfer Program.
“DWAC” shall mean Deposit Withdrawal at Custodian as defined by the DTC.
“DWAC Eligible” shall mean that (a) the Class A Common Stock are eligible at DTC for full services pursuant to DTC’s operational arrangements, including, without limitation, transfer through DTC’s DWAC system, (b) the Company has been approved (without revocation) by the DTC’s underwriting department, (c) the Transfer Agent is approved as an agent in the DTC/FAST Program, (d) the Commitment Shares or Put Shares, as applicable, are otherwise eligible for delivery via DWAC, and (e) the Transfer Agent does not have a policy prohibiting or limiting delivery of the Put Shares or Commitment Shares, as applicable, via DWAC.
“DWAC Shares” means Class A Common Stock that are (i) issued in electronic form, (ii) freely tradable and transferable and without restriction on resale and (iii) timely credited by the Company to the Investor’s or its designee’s specified DWAC account with DTC under the DTC/FAST Program, or any similar program hereafter adopted by DTC performing substantially the same function.
“Eligible Market” means the Principal Market or any nationally recognized exchange upon which the Class A Common Stock are listed.
“Environmental Laws” shall have the meaning set forth in Section 4.14.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exchange Cap” shall mean the maximum aggregate number of shares of Class A Common Stock that the Company may issue and sell pursuant to this Agreement (including, without limitation, all Put Shares and all Commitment Shares), when aggregated with any other shares of Class A Common Stock required to be aggregated therewith under the applicable rules of the Principal Market, without breaching the Company’s obligations under the rules and regulations of the Principal Market, which number shall not exceed 19.99% of the total number of shares of Class A Common Stock issued and outstanding immediately prior to the Execution Date (subject to appropriate adjustment for any stock split, stock dividend, stock combination, recapitalization or other similar transaction); provided, however, that the Exchange Cap shall not apply to any issuance from and after the date on which the Company obtains Stockholder Approval, and shall not apply to the extent that the applicable rules of the Principal Market otherwise permit the issuance of shares of Class A Common Stock in excess of such amount without Stockholder Approval.
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“Execution Date” shall have the meaning set forth in the preamble to this Agreement.
“Facility” shall mean the equity line of credit facility established pursuant to this Agreement, under which the Company may sell, and the Investor shall purchase, up to the Maximum Commitment Amount of Class A Common Stock.
“FINRA” shall mean the Financial Industry Regulatory Authority, Inc.
“Indemnified Party” shall have the meaning specified in Section 9.2.
“Indemnifying Party” shall have the meaning specified in Section 9.2.
“Indemnity Notice” shall have the meaning specified in Section 9.3(b).
“Intellectual Property” shall mean all trademarks, trademark applications, trade names, service marks, service mark registrations, service names, patents, patent applications, patent rights, copyrights, inventions, licenses, approvals, government authorizations, trade secrets or other intellectual property rights.
“Intraday Purchase Price” shall mean ninety-five percent (95%) of the lowest traded price of the Class A Common Stock on the Principal Market during the Intraday Valuation Period.
“Intraday Put” shall mean the right of the Company to require the Investor to purchase Class A Common Stock at the Intraday Purchase Price, subject to the terms and conditions of this Agreement.
“Intraday Put Notice” shall mean a written notice, substantially in the form of Exhibit B hereto, addressed to the Investor and setting forth the amount of Put Shares which the Company requests the Investor to purchase in an Intraday Put (which shall not exceed the Maximum Intraday Put Amount) pursuant to the terms of this Agreement.
“Intraday Valuation Period” shall mean the period beginning at the time that is ten (10) minutes after the time (rounded up to the nearest full minute) of the email confirmation from the Investor of its acceptance of such Intraday Put Notice (“Intraday Valuation Period Start Time”), and ending at the later to occur of (i) expiration of thirty (30) minutes after the Intraday Valuation Period Start Time and (ii) the time when the aggregate trading volume during one or more Trading Days since the Intraday Valuation Period Start Time equals or exceeds one thousand percent (1,000%) of the number of Put Shares purchased by the Investor pursuant to the relevant Intraday Put Notice, as the case may be, but in no event later than the same time of day as the Intraday Valuation Start Time on the fifteenth (15th) Trading Day after the Intraday Valuation Start Time.
“Intraday Valuation Period Start Time” shall have the meaning specified in the definition of Intraday Valuation Period.
“Investment Amount” shall mean the U.S. dollar value equal to the amount of Put Shares referenced in the Put Notice multiplied by the Purchase Price.
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“Investor” shall have the meaning specified in the preamble to this Agreement.
“Issuer Covered Person” shall have the meaning specified in Section 4.27.
“Lien” means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or any other restriction.
“Material Adverse Effect” shall mean any effect on the business, operations, properties, or financial condition of the Company and/or the Subsidiaries that is material and adverse to the Company and/or the Subsidiaries and/or any condition, circumstance, or situation that would prohibit or otherwise materially interfere with the ability of the Company and/or the Subsidiaries to enter into and/or perform its obligations under any Transaction Document and which shall be deemed to include any investigation of the Company, its directors or its officers by the SEC.
“Maximum Commitment Amount” shall mean Fifteen Million U.S. Dollars (US$15,000,000.00).
“Maximum Intraday Put Amount” shall mean 4.99% of the number of Class A Common Stock outstanding on the date of delivery of the applicable Intraday Put Notice. The Maximum Intraday Put Amount may be waived by the Investor in its sole discretion.
“Maximum Regular Put Amount” shall mean the lesser of: (i) one hundred percent (100%) of the Average Daily Trading Volume over the five (5) Trading Days preceding the applicable Put Date; (ii) thirty percent (30%) of the daily trading volume on the applicable Put Date; and (iii) the quotient obtained by dividing (x) Five Hundred Thousand U.S. Dollars (US$500,000) by (y) the closing price of the Class A Common Stock on the applicable Put Date (in each case to be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or similar transaction during the applicable period). The Maximum Regular Put Amount may be waived by the Investor in its sole discretion.
“Person” shall mean an individual, a corporation, a partnership, an association, a trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
“Principal Market” shall mean The Nasdaq Capital Market, provided however, that in the event the Class A Common Stock are ever listed or traded on the NYSE American, the Nasdaq Global Select Market, the Nasdaq Global Market, or the New York Stock Exchange, then the “Principal Market” shall mean such other market or exchange on which the Class A Common Stock are then listed or traded to the extent such other market or exchange is the principal trading market or exchange for the Class A Common Stock.
“Purchase Price” shall mean either the Regular Purchase Price or the Intraday Purchase Price, as applicable.
“Put” shall mean either a Regular Put or an Intraday Put.
“Put Date” shall mean any Trading Day during the Commitment Period that a Put Notice is deemed delivered pursuant to Section 2.1(c) or delivered pursuant to Section 2.2(a).
“Put Notice” shall mean either a Regular Put Notice or an Intraday Put Notice.
“Put Shares” shall mean all Class A Common Stock issued, or that the Company shall be entitled to issue, per any applicable Put Notice in accordance with the terms and conditions of this Agreement.
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“Registration Rights Agreement” means that agreement in the form attached hereto as Exhibit C.
“Registration Statement” shall have the meaning specified in Section 6.3.
“Regular Purchase Price” shall mean ninety-five percent (95%) of the lowest daily VWAP of the Class A Common Stock on the Principal Market during the Regular Valuation Period.
“Regular Put” shall mean the right of the Company to require the Investor to purchase Class A Common Stock at the Regular Purchase Price, subject to the terms and conditions of this Agreement.
“Regular Put Notice” shall mean a written notice, substantially in the form of Exhibit A hereto, addressed to the Investor and setting forth the amount of Put Shares which the Company intends to require the Investor to purchase in a Regular Put (which shall not exceed the Maximum Regular Put Amount unless otherwise waived by the Investor) pursuant to the terms of this Agreement.
“Regular Put Notice Delivery Window” shall have the meaning specified in Section 2.1(c).
“Regular Valuation Period” shall mean the period of three (3) consecutive Trading Days immediately following the applicable Put Date for a Regular Put.
“Regulation D” shall mean Regulation D promulgated under the Securities Act.
“Rule 144” shall mean Rule 144 promulgated under the Securities Act or any similar provision then in force under the Securities Act.
“Rule 144 Eligible” shall have the meaning specified in Section 6.4(b).
“Rules” shall have the meaning specified in Section 10.2.
“SEC” or “Commission” shall mean the United States Securities and Exchange Commission.
“SEC Documents” shall have the meaning specified in Section 4.5.
“Securities” means, collectively, the Put Shares and the Commitment Shares.
“Securities Act” shall mean the Securities Act of 1933, as amended.
“Securities Purchase Agreement” means that certain Securities Purchase Agreement, dated as of August 5, 2026, by and among the Company and the purchasers party thereto.
“Share Delivery Deadline” shall mean either the Regular Share Delivery Deadline or the Intraday Share Delivery Deadline.
“Short Sales” shall mean all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act or any hedging transaction that establishes a net short position with respect to the Class A Common Stock.
“Standstill Period” shall have the meaning specified in Section 6.13.
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“Stockholder Approval” shall mean such approval of the stockholders of the Company as may be required by the applicable rules and regulations of the Principal Market (including, without limitation, Nasdaq Listing Rule 5635(d)) (i) to permit the Company to permit the Investor to acquire shares of Class A Common Stock upon conversion of the Preferred Stock (as defined in the Securities Purchase Agreement) and pursuant to this Agreement in excess of the Exchange Cap, (ii) to increase the number of its authorized Class A Common Stock as and when needed to satisfy its obligations under the Transaction Documents; and (iii) to effect one or more reverse stock splits of its issued and outstanding Class A Common Stock (at a ratio of up to five hundred-to-one (500:1)) as and when determined by the Board of Directors, in each case in accordance with the Company’s articles of incorporation and bylaws and applicable Nevada law.
“Subsidiary” or “Subsidiaries” means any Person the Company wholly-owns or controls, or in which the Company, directly or indirectly, owns a majority of the voting stock or similar voting interest, in each case that would be disclosable pursuant to Item 601(b)(21) of Regulation S-K promulgated under the Securities Act.
“Third Party Claim” shall have the meaning specified in Section 9.3(a).
“Trading Day” means any full trading day (beginning at 9:30 a.m., New York City time, and ending at 4:00 p.m., New York City time) on the Principal Market or, if the Class A Common Stock are then listed on an Eligible Market, on such Eligible Market.
“Transaction Documents” shall mean this Agreement, the Certificate of Designation (as defined in the Securities Purchase Agreement), the Registration Rights Agreement, the Securities Purchase Agreement, the Transfer Agent Instruction Letter, the Lock-Up Agreements (as defined in the Securities Purchase Agreement), the Escrow Agreement (as defined in the Securities Purchase Agreement) and all schedules and exhibits hereto and thereto.
“Transfer Agent” shall mean VStock Transfer, LLC, the current transfer agent of the Company, with a mailing address of 18 Lafayette Place, Woodmere, New York 11598, and any successor transfer agent of the Company.
“Transfer Agent Instruction Letter” means the letter from the Company to the Transfer Agent which instructs the Transfer Agent to issue the Put Shares and the Commitment Shares pursuant to the Transaction Documents, in the form of Exhibit D attached hereto.
“Triggering Event” shall mean the occurrence of any of the following: (a) the failure of the Company to obtain the Stockholder Approval as and when required; (b) the failure of the Company to reserve and keep available the number of shares of Class A Common Stock required to be reserved under the Certificate of Designation or under any other Transaction Document; or (c) any material breach or default by the Company under any Transaction Document (other than this Agreement) that has not been cured within any applicable notice or cure period.
“Valuation Period” shall mean either the Regular Valuation Period or the Intraday Valuation Period, as applicable.
“Variable Rate Transaction” shall have the meaning specified in Section 6.10.
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“VWAP” means, for the Class A Common Stock as of any Trading Day, the U.S. dollar volume-weighted average price for the Class A Common Stock on the Principal Market (or, if the Class A Common Stock is then listed on an Eligible Market, on such Eligible Market) during the period beginning at 9:30 a.m., New York City time, or such other time publicly announced by the Principal Market (or by such Eligible Market, as applicable) as the official open (or commencement) of trading on the Principal Market (or on such Eligible Market, as applicable) on such Trading Day, and ending at 4:00 p.m., New York City time, or such other time publicly announced by the Principal Market (or by such Eligible Market, as applicable) as the official close of trading on the Principal Market (or on such Eligible Market, as applicable) on such Trading Day, as reported by Bloomberg, L.P. (or, if not reported on Bloomberg, L.P., another reporting service reasonably agreed to by the parties). All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction during such period.
ARTICLE II
PURCHASE AND SALE OF CLASS A COMMON STOCK
Section 2.1 REGULAR PUTS.
(a) Subject to the terms and conditions set forth herein (including, without limitation, the provisions of Article VII), the Company shall have the right, but not the obligation, from time to time during the Commitment Period, to direct the Investor to process a Regular Put by its delivery to the Investor of a Regular Put Notice to purchase Put Shares, provided that notwithstanding any other terms of this Agreement, in each instance unless waived by the Investor in its sole discretion (i) the Put Shares are not more than the Maximum Regular Put Amount for any Regular Put; (ii) the aggregate Investment Amount of all Puts (including such Regular Put) shall not exceed the Maximum Commitment Amount; and (iii) all Put Shares resulting from prior submitted Put Notices for all Puts have been delivered.
(b) At any time and from time to time during the Commitment Period, except as provided in this Agreement, the Company may cause a Regular Put by delivering a Regular Put Notice to the Investor via email, subject to satisfaction of the conditions set forth in Section 2.1, Section 7.1 and otherwise provided in this Agreement. The Company shall deliver, or cause to be delivered, the Put Shares as DWAC Shares to the Investor as required pursuant to Section 2.3(a).
(c) A Regular Put Notice shall be deemed delivered on a Trading Day if it is received by e-mail by the Investor if such notice is received on or after 4:00 p.m. New York City time and prior to 6:30 p.m. New York City time on such Trading Day (“Regular Put Notice Delivery Window”). If a Regular Put Notice is not received by the Investor during a Regular Put Notice Delivery Window, the Regular Put Notice will be deemed withdrawn, unless the Investor waives this requirement in writing (including by e-mail).
(d) If the closing price of the Class A Common Stock on the Principal Market (or on such Eligible Market, as applicable) on the Trading Day the Put Notice is received is less than US$1.00 per share, the Regular Put Notice will be deemed withdrawn, unless the Investor waives this requirement in writing (including by e-mail).
(e) The Purchase Price of the Put Shares purchased by the Investor pursuant to each Regular Put Notice shall be the Regular Purchase Price.
Section 2.2 INTRADAY PUTS.
(a) Subject to the terms and conditions set forth herein (including, without limitation, the provisions of Article VII), after delivery of a Regular Put Notice and prior to the end of the associated Regular Valuation Period, the Company may deliver to the Investor one or more Intraday Put Notices. Each Intraday Put Notice shall be subject to the Investor’s written acceptance and the terms, and subject to the conditions that, notwithstanding any other terms of this Agreement, in each instance unless waived by the Investor in its sole discretion: (i) the Intraday Put Shares are not more than the Maximum Intraday Put Amount for any Intraday Put; (ii) the aggregate Investment Amount of all Puts (including such requested Intraday Put) shall not exceed the Maximum Commitment Amount and (iii) all Put Shares resulting from prior submitted Put Notices for all Puts have been delivered.
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(b) The Company may cause an Intraday Put by delivering an Intraday Put Notice to the Investor by email to the Investor prior to 4:00 p.m. (New York City time) on the applicable Trading Day, which notice shall state a number of additional Put Shares (“Intraday Put Shares”) that the Company desires to sell to the Investor on that same Trading Day and request the Investor’s acceptance of an Intraday Put to be executed and priced in accordance with this Section 2.2(d), subject to satisfaction of the conditions set forth in Section 2.2, Section 7.1 and otherwise provided in this Agreement. The Company shall deliver, or cause to be delivered, the Put Shares as DWAC Shares to the Investor as required pursuant to Section 2.3(a).
(c) The Investor shall use reasonable best efforts to provide its acceptance or rejection of an Intraday Put Notice by email to the Company within thirty (30) minutes following the Investor’s receipt of such Intraday Put Notice. If the Company does not receive acceptance or rejection from the Investor of an Intraday Put Notice within such 30-minute period, such Intraday Put Notice shall be deemed rejected. For clarity, the Company may issue, and the Investor may accept, multiple Intraday Put Notices during a Trading Day.
(d) The Purchase Price of the Put Shares purchased by the Investor pursuant to each Intraday Put Notice shall be the Intraday Purchase Price.
Section 2.3 CLOSINGS.
(a) TIMING. (i) The Clearing Date of a Regular Put shall occur on the Trading Day following the delivery of the applicable Regular Put Notice in accordance with Section 2.1(c). On the Clearing Date, the Company shall deliver, or cause to be delivered the applicable Put Shares as DWAC Shares to the Investor no later than 9:30 a.m. (New York City Time) (the “Regular Share Delivery Deadline”). The Closing of a Regular Put shall occur two (2) Trading Days following the end of the Regular Valuation Period. In addition, on or prior to any such Closing or on the date of the delivery of the applicable Regular Put Notice, as required pursuant to Section 7.1, each of the Company and the Investor shall deliver to each other all documents, instruments and writings required to be delivered or reasonably requested by either of them pursuant to this Agreement in order to implement and effect the transactions contemplated herein
(ii) With respect to an Intraday Put accepted by the Investor pursuant to Section 2.2(b), the Company will deliver the relevant Transfer Agent Instruction Letter as promptly as practicable following its receipt of the Investor’s acceptance of the relevant Intraday Put Notice, with a copy to the Investor by email; the Company will use all commercially reasonable efforts to cause the Transfer Agent to deliver email confirmation to the Investor’s broker, with the Investor copied on such email, that the Transfer Agent is processing for issuance such Intraday Put Shares within one (1) hour following its receipt of such acceptance, and the “Intraday Share Delivery Deadline” shall be the time that is two (2) hours after the Investor’s receipt of confirmation from the Transfer Agent that it has received the relevant Transfer Agent Instruction Letter, rounded up to the nearest full minute.
(iii) In addition to any other rights available to the Investor, if the Company fails to cause the Transfer Agent to transmit the Put Shares pursuant to a Put Notice before the applicable Share Delivery Deadline, the Investor may elect to deem such Put Notice rescinded.
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(iv) Payment of the Investment Amount minus the Clearing Costs related to any applicable Put Notice shall be made by the Investor by wire transfer of immediately available funds to an account designated by the Company not later than two (2) Trading Days following the end of the applicable Valuation Period, as may be adjusted for any credit of a Cover Price available to the Investor in accordance with Section 2.3(b).
(b) COMPENSATION FOR FAILURE TO TIMELY DELIVER PUT SHARES. In addition to any other rights available to the Investor, if the Company fails to cause the Transfer Agent to transmit the Put Shares pursuant to the applicable Put Notice before the applicable Share Delivery Deadline, and if after such Share Delivery Deadline the Investor purchases (in an open market transaction or otherwise) Class A Common Stock to deliver in satisfaction of a sale by the Investor of such Put Shares that the Investor anticipated receiving from the Company in respect of such applicable Put Notice, then the Company shall, within two (2) Trading Days after the Investor’s request, which such request shall be made within two (2) Trading Days following the Share Delivery Deadline, either (i) pay cash to the Investor in an amount equal to the Investor’s total purchase price (including brokerage commissions, if any) for the Class A Common Stock so purchased (the “Cover Price”), at which point the Company’s obligation to deliver such Put Shares shall terminate, (ii) promptly honor its obligation to deliver to the Investor such Put Shares as DWAC Shares and pay cash to the Investor in an amount equal to the excess (if any) of the Cover Price over the total Investment Amount paid by the Investor in connection with such applicable Put Notice, or (iii) be deemed to have accepted notice that such Cover Price shall be credited as the Investment Amount to be paid in respect of one or more subsequent Put Notices, in the discretion of the Investor. The Investor shall provide the Company with written notice indicating the amounts payable to the Investor in respect of the Cover Price and evidence of the amount of such amounts payable. Nothing herein shall limit the Investor’s right to pursue a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver Class A Common Stock in connection with a Put Notice.
(c) RETURN OF SURPLUS. If the value of the Put Shares delivered to the Investor causes the Company to exceed the Maximum Commitment Amount, then the Investor shall return to the Company the surplus amount of Put Shares associated with such Put (to the extent such shares have not yet been sold by the Investor), and the Purchase Price with respect to such Put shall be reduced by any Clearing Costs incurred related to the return of such Put Shares. To the extent any such surplus Put Shares have been sold prior to such return request, the Investor shall remit to the Company the net sale proceeds of such surplus shares, less any Clearing Costs.
(d) RESALES DURING VALUATION PERIOD. The parties acknowledge and agree that during any Regular Valuation Period or Intraday Valuation Period, the Investor may contract for, or otherwise effect, the resale of the subject purchased Put Shares to third parties, and shall be solely responsible for its own compliance with applicable securities laws in connection with such resales.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF INVESTOR
The Investor represents and warrants to the Company that as of the Execution Date, each date a Put Notice is submitted and at each Closing Date:
Section 3.1 INTENT. The Investor is entering into this Agreement and acquiring the Securities for its own account, for investment purposes and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered under or exempt from the registration requirements of the Securities Act; provided, however, that by making the representations herein, the Investor does not agree, or make any representation or warranty, to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with, or pursuant to, a registration statement filed pursuant to the Registration Rights Agreement or an applicable exemption under the Securities Act. The Investor does not presently have any agreement or understanding, directly or indirectly, with any Person to sell or distribute any of the Securities.
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Section 3.2 NO LEGAL ADVICE FROM THE COMPANY. The Investor acknowledges that it has had the opportunity to review this Agreement and the transactions contemplated by this Agreement with its own legal counsel and investment and tax advisors. Except with respect to the representations, warranties and covenants contained in this Agreement, the Investor is relying solely on such counsel and advisors and not on any statements or representations of the Company or any of its representatives or agents for legal, tax or investment advice with respect to this investment, the transactions contemplated by this Agreement or the securities laws of any jurisdiction.
Section 3.3 ACCREDITED INVESTOR. The Investor is an accredited investor as defined in Rule 501(a) of Regulation D, and the Investor has such experience in business and financial matters that it is capable of evaluating the merits and risks of an investment in the Securities. The Investor acknowledges that an investment in the Securities is speculative and involves a high degree of risk.
Section 3.4 AUTHORITY. The Investor has the requisite power and authority to enter into and perform its obligations under this Agreement and the other Transaction Documents and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the other Transaction Documents and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action and no further consent or authorization of the Investor is required. Each Transaction Document to which it is a party has been duly executed by the Investor, and when delivered by the Investor in accordance with the terms hereof, will constitute the valid and binding obligation of the Investor enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application.
Section 3.5 NOT AN AFFILIATE. To the Investor’s knowledge after due inquiry, the Investor is not an officer, director or Affiliate of the Company.
Section 3.6 ORGANIZATION AND STANDING. The Investor is an entity duly formed, validly existing and in good standing under the laws of the jurisdiction of its formation with full right, limited liability company power and authority to enter into and to consummate the transactions contemplated by this Agreement and the other Transaction Documents.
Section 3.7 ABSENCE OF CONFLICTS. The execution and delivery of this Agreement and the other Transaction Documents, and the consummation of the transactions contemplated hereby and thereby and compliance with the requirements hereof and thereof, will not (a) violate any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on the Investor, (b) violate any provision of any indenture, instrument or agreement to which the Investor is a party or is subject, or by which the Investor or any of its assets is bound, or conflict with or constitute a material default thereunder, (c) result in the creation or imposition of any lien pursuant to the terms of any such indenture, instrument or agreement, or constitute a breach of any fiduciary duty owed by the Investor to any third party, or (d) require the approval of any third-party (that has not been obtained) pursuant to any material contract, instrument, agreement, relationship or legal obligation to which the Investor is subject or to which any of its assets, operations or management may be subject.
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Section 3.8 DISCLOSURE; ACCESS TO INFORMATION. The Investor had an opportunity to review copies of the SEC Documents filed on behalf of the Company and has had access to all publicly available information with respect to the Company; provided, however, that the Investor makes no representation or warranty hereunder with respect to any SEC Document and is relying on the representations and warranties of the Company in Article IV with respect to the SEC Documents.
Section 3.9 MANNER OF SALE. At no time was the Investor presented with or solicited by or through any leaflet, public promotional meeting, television advertisement or any other form of general solicitation or advertisement regarding the Securities.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Investor that, except as set forth in the disclosure schedules hereto that as of the Execution Date, each date a Put Notice is submitted and at each Closing Date:
Section 4.1 ORGANIZATION OF THE COMPANY. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Nevada, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. 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. Each of the Company and the Subsidiaries is not in violation or default of any of the provisions of its respective 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, could not have or reasonably be expected to result in 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.
Section 4.2 AUTHORITY. The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and the other Transaction Documents. The execution and delivery of this Agreement and 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 corporate action and no further consent or authorization of the Company or its board of directors or stockholders is required. Each of this Agreement and the other Transaction Documents has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application.
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Section 4.3 CAPITALIZATION. As of the Execution Date, the authorized capital stock of the Company is expected to be as set forth on Schedule 4.3. Except as set forth in the SEC Documents or on Schedule 4.3, the Company has not issued any capital stock since the date of 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 option plans, the issuance of Class A Common Stock to employees pursuant to the Company’s employee stock purchase 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. 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 in the SEC Documents or on Schedule 4.3, and except as a result of the purchase and sale of the Securities, 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 Class A Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional Class A Common Stock or Common Stock Equivalents. The issuance and sale of the Securities will not obligate the Company to issue Class A Common Stock or other securities to any Person (other than the Investor) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such 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.
Section 4.4 LISTING AND MAINTENANCE REQUIREMENTS. The Class A Common Stock are 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 Class A Common Stock under the Exchange Act, nor has the Company received any notification that the SEC is contemplating terminating such registration. The Company has not, in the twelve (12) months preceding the Execution Date, received notice from the Principal Market to the effect that the Company is not in compliance with the listing or maintenance requirements of such Principal Market. The Company is, and, except as set forth in Schedule 4.4, has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements.
Section 4.5 SEC DOCUMENTS; DISCLOSURE. 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 one (1) year preceding the Execution Date (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 Documents”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Documents prior to the expiration of any such extension. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and other federal laws, rules and regulations applicable to such SEC Documents, and none of the SEC Documents 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 light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Documents comply as to form and substance in all material respects with applicable accounting requirements and the published rules and regulations of the SEC or other applicable rules and regulations with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis during the periods involved (except (a) as may be otherwise indicated in such financial statements or the notes thereto or (b) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of 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). The Company maintains a system of internal accounting controls appropriate for its size. There is no transaction, arrangement, or other relationship between the Company and an unconsolidated or other off balance sheet entity that is not disclosed by the Company in its financial statements or otherwise that would be reasonably likely to have a Material Adverse Effect. 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 the Investor or its agents or counsel with any information that it believes constitutes or might constitute material, non- public information. The Company understands and confirms that the Investor will rely on the foregoing representation in effecting transactions in securities of the Company.
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Section 4.6 VALID ISSUANCES. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be validly issued, fully paid, and non-assessable (which means that no further sums are required to be paid by the holders thereof in connection with the issue thereof), free and clear of all Liens imposed by the Company, other than restrictions on transfer provided for in the Transaction Documents and under the Securities Act.
Section 4.7 NO CONFLICTS. To the knowledge of the Company, the execution, delivery and performance of this Agreement and the other Transaction Documents by the Company, and the consummation by the Company of the transactions contemplated hereby and thereby, including, without limitation, the issuance of the Put Shares and the Commitment Shares, do not and will not: (a) result in a violation of the Company’s or any Subsidiary’s articles of incorporation, bylaws or other organizational or charter documents, (b) conflict with, or constitute a material default (or an event that with notice or lapse of time or both would become a material 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, acceleration or cancellation of, any agreement, indenture, instrument or any “lock-up” or similar provision of any underwriting or similar agreement to which the Company or any Subsidiary is a party, or (c) result in a violation of any federal, state or local law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to the Company or any Subsidiary or by which any property or asset of the Company or any Subsidiary is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect), nor is the Company otherwise in violation of, conflict with or in default under any of the foregoing. The business of the Company is not being conducted in violation of any law, ordinance or regulation of any governmental entity. The Company is not required under federal, state or local law, rule or regulation to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under this Agreement or the other Transaction Documents (other than any SEC, FINRA or state securities filings that may be required to be made by the Company in connection with the issuance of the Commitment Shares or subsequent to any Closing or any registration statement that may be filed pursuant hereto); provided that, for purposes of the representation made in this sentence, the Company is assuming and relying upon the accuracy of the relevant representations and agreements of Investor herein.
Section 4.8 NO MATERIAL ADVERSE CHANGE. No event has occurred that would have a Material Adverse Effect on the Company or any Subsidiary that has not been disclosed in subsequent SEC filings.
Section 4.9 LITIGATION AND OTHER PROCEEDINGS. To the knowledge of the Company, there are no actions, suits, investigations, inquiries or proceedings pending or threatened against or affecting the Company, any Subsidiary or any of their respective properties, nor has the Company received any written or oral notice of any such action, suit, proceeding, inquiry or investigation, which would have a Material Adverse Effect or would require disclosure under the Securities Act or the Exchange Act. No judgment, order, writ, injunction or decree or award has been issued by or, to the knowledge of the Company, requested of any court, arbitrator or governmental agency which would have a Material Adverse Effect. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the SEC involving the Company, any Subsidiary, or any current or former director or officer of the Company or any Subsidiary.
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Section 4.10 REGISTRATION RIGHTS. Except as set forth in the SEC Documents, no Person (other than the Investor) has any right to cause the Company to effect the registration under the Securities Act of any securities of the Company or any Subsidiary.
Section 4.11 INVESTOR’S STATUS. The Company acknowledges and agrees that the Investor is acting solely in the capacity of arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby. The Company further acknowledges that the Investor is not 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 hereby and thereby and any advice given by the Investor or any of its representatives or agents in connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to the Investor’s purchase of the Securities. The Company further represents to the Investor that the Company’s decision to enter into the Transaction Documents has been based solely on the independent evaluation by the Company and its representatives and advisors.
Section 4.12 NO GENERAL SOLICITATION; NO INTEGRATED OFFERING. Neither the Company, any Subsidiary, nor any of their respective Affiliates, nor any Person acting on their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with the offer or sale of the Securities. Neither the Company, any Subsidiary, nor any of their respective Affiliates, nor any Person acting on 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 require registration of the offer and sale of any of the Securities under the Securities Act, whether through integration with prior offerings or otherwise.
Section 4.13 INTELLECTUAL PROPERTY RIGHTS. To the knowledge of the Company, the Company and each Subsidiary own or possess adequate rights or licenses to use all material trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and rights necessary to conduct their respective businesses as now conducted. None of the Company’s, nor any Subsidiary’s Intellectual Property has expired or terminated, or, by the terms and conditions thereof, could expire or terminate within three years from the date of this Agreement if such expiration or termination could reasonably be expected to have a Material Adverse Effect. The Company does not have any knowledge of any infringement by the Company and/or any Subsidiary of any material Intellectual Property of others, or of any such development of similar or identical trade secrets or technical information by others, and there is no claim, action or proceeding being made or brought against, or to the Company’s knowledge, being threatened against, the Company and/or any Subsidiary regarding the infringement of any Intellectual Property, which could reasonably be expected to have a Material Adverse Effect.
Section 4.14 ENVIRONMENTAL LAWS. To the Company’s knowledge, the Company and each Subsidiary (i) is in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) has received all permits, licenses or other approvals required of it under applicable Environmental Laws to conduct its respective businesses and (iii) is in compliance with all terms and conditions of any such permit, license or approval, except where, in each of the three foregoing clauses, the failure to so comply could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
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Section 4.15 TITLE. Except as disclosed in the SEC Documents, to the knowledge of the Company, the Company and each Subsidiary has good and marketable title in fee simple to all real property owned by it and good and marketable title in all personal property owned by it that is material to the business of the Company and each Subsidiary, in each case free and clear of all Liens and, except for 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 or any Subsidiary and Liens for the payment of federal, state or other taxes, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company or any Subsidiary is held under valid, subsisting and enforceable leases with which the Company is in compliance with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company or any Subsidiary.
Section 4.16 INSURANCE. The Company and each Subsidiary is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and each Subsidiary is engaged. Neither the Company, nor any Subsidiary has been refused any insurance coverage sought or applied for, and the Company has no reason to believe that it or any Subsidiary 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 at a cost that would not materially and adversely affect the condition, financial or otherwise, or the earnings, business or operations of the Company, taken as a whole.
Section 4.17 REGULATORY PERMITS. The Company and each Subsidiary possesses all material certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct its businesses, and neither the Company, nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit.
Section 4.18 TAX STATUS. The Company and each Subsidiary has made or filed all federal and state income and all other material tax returns (or extensions thereof), reports and declarations required by any jurisdiction to which it is subject (unless and only to the extent that the Company has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported taxes) and 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, except those being contested in good faith and has set aside on its books provision reasonably adequate for the payment of all 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 know of no basis for any such claim.
Section 4.19 TRANSACTIONS WITH AFFILIATES. Except as set forth in the SEC Documents, 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, 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 or partner, in each case in excess of the lesser of (i) US$120,000 or (ii) one percent of the average of the Company’s total assets at year end for the last two completed fiscal years, other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company or any Subsidiary and (iii) other employee benefits, including stock option agreements under any stock option plan of the Company.
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Section 4.20 APPLICATION OF TAKEOVER PROTECTIONS. The Company and its board of directors have taken or will take prior to the Execution Date 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 articles of incorporation or bylaws of the Company or the laws of the State of Nevada which is or could become applicable to the Investor as a result of the transactions contemplated by this Agreement, including, without limitation, the Company’s issuance of the Securities and the Investor’s ownership of the Securities.
Section 4.21 FOREIGN CORRUPT PRACTICES. Neither the Company, any Subsidiary, nor to the knowledge of the Company, 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 the Foreign Corrupt Practices Act of 1977, as amended.
Section 4.22 SARBANES-OXLEY. The Company is in compliance with all provisions of the Sarbanes-Oxley Act of 2002, as amended, which are applicable to it.
Section 4.23 CERTAIN FEES. No brokerage or finder’s fees or commissions are or will be payable by the Company 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 Investor shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of any Persons for fees of a type contemplated in this Section 4.23 that may be due in connection with the transactions contemplated by the Transaction Documents.
Section 4.24 INVESTMENT COMPANY. The Company is not an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
Section 4.25 ACCOUNTANTS. The Company’s accountants are set forth in the SEC Documents and, to the knowledge of the Company, such accountants are an independent registered public accounting firm as required by the Securities Act.
Section 4.26 NO MARKET MANIPULATION. Neither the Company, nor any Subsidiary has, and to its knowledge no Person acting on either of their 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.
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Section 4.27 NO DISQUALIFICATION EVENTS. None of the Company, any Subsidiary, any of their predecessors, any affiliated issuer, any director, executive officer, other officer of the Company or any Subsidiary participating in the offering contemplated hereby, 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”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3) under the Securities Act. The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event.
Section 4.28 MONEY LAUNDERING. The Company and each Subsidiary is in compliance with, and has not previously violated, the USA PATRIOT ACT of 2001 and all other applicable U.S. and non-U.S. anti-money laundering laws and regulations, including, but not limited to, the laws, regulations and Executive Orders and sanctions programs administered by the U.S. Office of Foreign Assets Control, including, but not limited, to (i) Executive Order 13224 of September 23, 2001 entitled, “Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism” (66 Fed. Reg. 49079 (2001)); and (ii) any regulations contained in 31 CFR, Subtitle B, Chapter V.
Section 4.29 ILLEGAL OR UNAUTHORIZED PAYMENTS; POLITICAL CONTRIBUTIONS. Neither the Company, nor any Subsidiary has, nor, to the best of the Company’s knowledge (after reasonable inquiry of its officers and directors), any of the officers, directors, employees, agents or other representatives of the Company, any Subsidiary or any other business entity or enterprise with which the Company is or has been affiliated or associated, has, directly or indirectly, made or authorized any payment, contribution or gift of money, property, or services, whether or not in contravention of applicable law, (a) as a kickback or bribe to any Person or (b) to any political organization, or the holder of or any aspirant to any elective or appointive public office except for personal political contributions not involving the direct or indirect use of funds of the Company.
Section 4.30 SHELL COMPANY STATUS. The Company is not, and has never been, an issuer of the kind described in Rule 144(i)(1) under the Securities Act. The Company is subject to the reporting requirements of Section 13 of the Exchange Act, and has filed all reports and other materials required to be filed by it under the Exchange Act.
Section 4.31 ABSENCE OF SCHEDULES. In the event that on the Execution Date, the Company does not deliver any disclosure schedule contemplated by this Agreement, the Company hereby acknowledges and agrees that (i) each such undelivered disclosure schedule shall be deemed to read as follows: “Nothing to Disclose”, and (ii) the Investor has not otherwise waived delivery of such disclosure schedule.
Section 4.32 NO TRIGGERING EVENT. No Triggering Event has occurred and is continuing.
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ARTICLE V
COVENANTS OF INVESTOR
Section 5.1 CERTAIN TRANSACTIONS AND CONFIDENTIALITY. The Investor, covenants that neither it, nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any Short Sales of any of the Company’s securities during the period commencing with the execution of this Agreement and ending on the date on which the Facility is no longer outstanding (i.e., the Maximum Commitment Amount has been purchased or this Agreement has otherwise been terminated in accordance with its terms). For the purposes hereof, and in accordance with Regulation SHO, the sale after delivery of a Put Notice of such number of shares of Class A Common Stock reasonably expected to be purchased under a Put Notice shall not be deemed a Short Sale. The Investor, covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the Current Report (as defined in Section 6.3), such Investor will maintain the confidentiality of the existence and terms of this transaction. Notwithstanding the foregoing and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) the Investor does not make 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 disclosed pursuant to the Current Report, (ii) the Investor shall not 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 disclosed pursuant to the Current Report and (iii) the Investor shall not 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, agents or Affiliates after the filing of the Current Report
ARTICLE VI
COVENANTS OF THE COMPANY
Section 6.1 LISTING OF CLASS A COMMON STOCK. The Company shall promptly secure the listing of all of the Put Shares and Commitment Shares to be issued to the Investor hereunder on the Principal Market (subject to official notice of issuance) and shall use its best efforts to maintain, so long as the Class A Common Stock shall be so listed, the listing of all such Put Shares and Commitment Shares from time to time issuable hereunder. The Company shall use best efforts to continue the listing and trading of the Class A Common Stock on the Principal Market (including, without limitation, maintaining sufficient net tangible assets) and will comply in all respects with the Company’s reporting, filing and other obligations under its organizational documents and the rules of the Principal Market. The Company shall not take any action that would reasonably be expected to result in the delisting or suspension of the Class A Common Stock on the Principal Market. The Company shall promptly, and in no event later than the following Trading Day after receiving such notice, provide to the Investor copies of any notices it receives from any Person regarding the continued eligibility of the Class A Common Stock for listing on the Principal Market. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 6.1. The Company shall take all action necessary to ensure that the Class A Common Stock can be transferred electronically as DWAC Shares. If the Company receives a final non-appealable delisting notice from the Principal Market or if the Class A Common Stock fail to be listed on an Eligible Market, then the Investor may terminate its obligations under this Agreement by written notice to the Company and may deem any outstanding Put Notice as withdrawn.
Section 6.2 OTHER EQUITY LINES. So long as this Agreement remains in effect, the Company covenants and agrees that it will not enter into any other equity line of credit agreement with any other party, without the Investor’s prior written consent, which consent may be granted or withheld in the Investor’s sole and absolute discretion.
Section 6.3 FILING OF CURRENT REPORT AND REGISTRATION STATEMENT. The Company agrees that it shall file a Current Report on Form 8-K, including certain Transaction Documents as exhibits thereto, with the SEC within the time required by the Exchange Act, relating to the transactions contemplated by, and describing the material terms and conditions of, such Transaction Documents (the “Current Report”). The Company shall permit the Investor to review and comment upon the pre-filing draft version of the Current Report at least two (2) Trading Days prior to its filing with the SEC and the Company shall give reasonable consideration to all such comments. The Investor shall use its reasonable best efforts to comment upon the pre-filing draft version of the Current Report within one (1) Trading Day from the date the Investor receives it from the Company. The Company shall also file with the SEC a new registration statement on Form S-1 (the “Registration Statement”), the timing and terms of which shall be governed by Section 2 of the Registration Rights Agreement.
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Section 6.4 COMMITMENT FEE; ISSUANCE OF COMMITMENT SHARES; FAILURE TO INCLUDE IN REGISTRATION STATEMENT.
(a) In consideration for the Investor’s execution and delivery of, and performance under, this Agreement, the Company shall pay to the Investor a commitment fee equal to US$150,000 (the “Commitment Fee”), which shall be paid in a single installment in the form of Class A Common Stock. All Class A Common Stock issued by the Company to the Investor under this Section 6.4 shall be referred to as “Commitment Shares.” The Commitment Fee shall be fully earned as of the Execution Date, and the Commitment Shares shall be issued and delivered to the Investor on the Closing Date (as defined in the Securities Purchase Agreement). The number of Commitment Shares to be issued to the Investor on the Closing Date shall be equal to the quotient obtained by dividing (a) US$150,000 by (b) the Nasdaq Official Closing Price of the Class A Common Stock on the Execution Date (the “Initial Commitment Share Reference Price”). The Investor may, at its option, elect to receive in lieu of any or all of the Commitment Shares (including True-Up Commitment Shares, as defined below) pre-funded warrants to purchase an equal number of shares of Class A Common Stock exercisable at US$0.0001 per share, permitting cashless (net) exercise and with no termination date, and in form and substance reasonably acceptable to the Investor (the “Pre-Funded Warrants”). (To the extent that the Investor receives Pre-Funded Warrants pursuant to this Section, the term “Commitment Shares” as used in this Agreement and the Registration Rights Agreement shall include the shares issuable upon exercise of such Pre-Funded Warrants.)
(b) Upon the earlier of (i) the Commitment Shares becoming eligible for resale pursuant to Rule 144 under the Securities Act (“Rule 144 Eligible”) or (ii) the effectiveness of the Registration Statement covering the resale of the Commitment Shares, if the True-Up Commitment Share Reference Price is less than the Initial Commitment Share Reference Price (in each case, as appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or similar transaction occurring in the interim), the Company shall immediately issue and deliver to the Investor such number of additional Commitment Shares (the “True-Up Commitment Shares”) as is necessary so that the aggregate number of Commitment Shares issued in respect of the Commitment Fee equals the quotient obtained by dividing US$150,000 by the True-Up Commitment Share Reference Price. For purposes hereof, the “True-Up Commitment Share Reference Price” means the Nasdaq Official Closing Price of the Class A Common Stock on the effectiveness date of the Registration Statement (or, if the initial Commitment Shares become Rule 144 Eligible prior to such effectiveness, on the date on which the initial Commitment Shares become Rule 144 Eligible).
(c) For the avoidance of doubt, the Commitment Fee and the Commitment Shares shall be fully earned as of the Execution Date, and the issuance of the Commitment Shares is not contingent upon any other event or condition, including, without limitation, the effectiveness of the Registration Statement or the Company’s submission of a Put Notice to the Investor, and is irrespective of any termination of this Agreement.
(d) To the extent that the issuance of Commitment Shares to the Investor would exceed the Beneficial Ownership Limitation as set forth in Section 7.1(g), the Investor shall be issued pre-funded warrants to purchase the number of Class A Common Stock by which the Commitment Shares otherwise to be issued would exceed such limitation.
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(e) On the Execution Date, the Company shall deliver to the Transfer Agent the Transfer Agent Instruction Letter duly executed by the Company and the Transfer Agent. The Company and the Investor agree (i) that the Investor may issue one or more Notices of Issuance (as defined in the Transfer Agent Instruction Letter) instructing the Transfer Agent to issue to the Investor True-Up Commitment Shares due to the Investor, provided that all Notices of Issuance in the aggregate do not exceed the total number of True-Up Commitment Shares calculated as set forth above, and (ii) that all calculations by the Investor of the number of True-Up Commitment Shares to be issued shall be deemed correct absent manifest error.
(f) The Company shall include in the Registration Statement filed with the SEC all Commitment Shares, provided that, in addition to all other remedies at law or in equity or otherwise under this Agreement, failure to do so (except pursuant to objection by the SEC) will result in liquidated damages of US$100,000.00, being immediately due and payable to the Investor at its election in the form of cash payment and the Investor may terminate its obligations under this Agreement by written notice to the Company.
Section 6.5 DUE DILIGENCE; CONFIDENTIALITY; NON-PUBLIC INFORMATION. The Investor shall have the right, from time to time as the Investor may reasonably deem appropriate, to perform reasonable due diligence on the Company during normal business hours. The Company, each Subsidiary and their respective officers and employees shall provide information and reasonably cooperate with the Investor in connection with any reasonable request by the Investor related to the Investor’s due diligence of the Company. The Company agrees not to disclose any Confidential Information of the Investor to any third party, except for attorneys, accountants, advisors who have a need to know such Confidential Information and are bound by confidentiality, and shall not use any Confidential Information for any purpose other than in connection with, or in furtherance of, the transactions contemplated hereby. The Company acknowledges that the Confidential Information of the Investor shall remain the property of the Investor and agrees that it shall take all reasonable measures to protect the secrecy of any Confidential Information disclosed by the Investor. The Company confirms that neither it nor any other Person acting on its behalf shall provide the Investor or its agents or counsel with any information that constitutes or might constitute material, non-public information, unless a simultaneous public announcement thereof is made by the Company in the manner contemplated by Regulation FD. In the event of a breach of the foregoing covenant by the Company or any Person acting on its behalf (as determined in the reasonable good faith judgment of the Investor), in addition to any other remedy provided herein or in the other Transaction Documents, the Investor, upon the advice of its counsel, shall have the right to make a public disclosure, in the form of a press release, public advertisement or otherwise, of such material, non-public information without the prior approval by the Company; provided the Investor shall have first provided notice to the Company that it believes it has received information that constitutes material, non-public information, and the Company shall have had at least twenty-four (24) hours to publicly disclose such material, non-public information prior to any such disclosure by the Investor, and the Company shall have failed to publicly disclose such material, non-public information within such time period. The Investor shall not have any liability to the Company, any Subsidiary, or any of their respective directors, officers, employees, stockholders, Affiliates or agents, for any such disclosure. The Company understands and confirms that the Investor shall be relying on the foregoing covenants in effecting transactions in securities of the Company.
Section 6.6 PURCHASE RECORDS. The Company shall maintain records showing the Available Amount at any given time and the date, Investment Amount and Put Shares for each Put, contained in the applicable Put Notice.
Section 6.7 TAXES. The Company shall pay any and all transfer, stamp or similar taxes that may be payable with respect to the issuance and delivery of any Class A Common Stock to the Investor made under this Agreement.
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Section 6.8 USE OF PROCEEDS. The Company will use the net proceeds from the offering of Put Shares hereunder for the purposes described in the Registration Statement.
Section 6.9 OTHER TRANSACTIONS. The Company shall not enter into, announce or recommend to its stockholders any agreement, plan, arrangement or transaction in or of which the terms thereof would restrict, materially delay, conflict with or impair the ability or right of the Company to perform its obligations under the Transaction Documents, including, without limitation, the obligation of the Company to deliver the Put Shares and the Commitment Shares to the Investor in accordance with the terms of the Transaction Documents.
Section 6.10 NO VARIABLE-RATE TRANSACTIONS. Without the prior written consent of the Investor, for so long as the Facility remains outstanding, except for the transactions contemplated under the Transaction Documents, the Company shall not enter into any Variable Rate Transaction or have in force and effect any existing Variable Rate Transaction. For purposes of this Agreement, “Variable Rate Transaction” means a transaction in which the Company (i) issues or sells any equity or debt securities that are convertible into, exchangeable or exercisable for, or include the right to receive additional Class A Common Stock or Common Stock Equivalents either (A) at a conversion price, exercise price, exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the Class A Common Stock at any time after the initial issuance of such equity or debt 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 equity or debt 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 Class A Common Stock (including, without limitation, any “full ratchet” or “weighted average” anti-dilution provisions, but not including any standard anti-dilution protection for any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction), (ii) issues or sells any equity or debt securities, including without limitation, Class A Common Stock or Common Stock Equivalents, either (A) at a 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 Class A Common Stock (other than standard anti-dilution protection for any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction), or (B) that are subject to or contain any put, call, redemption, buy-back, price-reset or other similar provision or mechanism (including, without limitation, a “Black-Scholes” put or call right, other than in connection with a “fundamental transaction”) that provides for the issuance of additional equity securities of the Company or the payment of cash by the Company, or (iii) enters into any agreement, including, but not limited to, an “equity line of credit” (other than with the Investor) or other continuous offering or similar offering of Class A Common Stock or Common Stock Equivalents, whereby the Company may sell Class A Common Stock or Common Stock Equivalents at a future determined price.
Section 6.11 INTEGRATION. In any case subject to the terms of the Registration Rights Agreement, from and after the Execution Date, neither the Company, nor any of its Subsidiaries or Affiliates will, and the Company shall use its reasonable efforts to ensure that no Person acting on their behalf will, directly or indirectly, make any offers or sales of any security or solicit any offers to buy any security, under circumstances that would require registration of the offer and sale of any of the Securities under the Securities Act.
Section 6.12 TRANSACTION DOCUMENTS. On the Execution Date, the Company shall deliver to the Investor executed copies of all of the Transaction Documents.
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Section 6.13 STANDSTILLS. Unless waived by the Investor, notwithstanding any other provisions set forth in the Transaction Documents, the Company hereby covenants and agrees that it shall not issue any Class A Common Stock or Common Stock Equivalents, or enter into any agreement to do so during the following periods (each a “Standstill Period”): (i) beginning upon the submission of any Regular Put Notice that has been accepted in accordance with the terms hereof and ending upon the later of: (A) the Trading Day following the expiration of the Regular Valuation Period applicable to such Regular Put Notice (a “Regular Put Valuation Period Standstill”), and (B) the close of the Trading Day on which the aggregate trading volume of the Class A Common Stock over the Trading Days since issuance of such Regular Put Notice shall have exceeded Five Hundred percent (500%) of the number of Put Shares sold pursuant to such Regular Put Notice (a “Regular Put Minimum Volume Standstill”), and (ii) beginning upon the submission of any Intraday Put Notice that has been accepted in accordance with the terms hereof and ending at the end of the applicable Intraday Valuation Period (an “Intraday Put Valuation Period Standstill”).
Section 6.14 IRREVOCABLE TRANSFER AGENT INSTRUCTIONS. On or prior to the Execution Date, the Company shall deliver to the Transfer Agent the Transfer Agent Instruction Letter, duly executed by the Company, which shall be irrevocable and shall direct the Transfer Agent to issue and deliver the Put Shares and the Commitment Shares to or for the account of the Investor in accordance with the Transaction Documents. The Company hereby irrevocably authorizes and instructs the Transfer Agent, and shall cause the Transfer Agent, to issue and deliver the Put Shares and the Commitment Shares as DWAC Shares upon its receipt of a Notice of Issuance, without any further act, consent, direction or instruction of, or notice to, the Company. In the event the Company fails to timely deliver the Transfer Agent Instruction Letter, or the Transfer Agent fails to issue and deliver any Put Shares or Commitment Shares when required under the Transaction Documents, the Company hereby irrevocably and unconditionally authorizes the Investor (or its designee) to deliver a Notice of Issuance directly to the Transfer Agent on behalf of the Company, and agrees that the Transfer Agent may rely upon, and the Company shall cause the Transfer Agent to honor, any such Notice of Issuance without any further act, consent, direction or instruction of, or notice to, the Company. The Company acknowledges and agrees that the foregoing instructions and authorizations constitute a material inducement to the Investor entering into this Agreement, that the Investor is relying upon them, that they may not be amended, revoked or withdrawn without the prior written consent of the Investor, and that the Company’s breach of this Section 6.14 would cause irreparable harm to the Investor for which a remedy at law would be inadequate; accordingly, the Investor shall be entitled to seek specific performance of, and injunctive relief to enforce, this Section 6.14, without the necessity of posting a bond or other security, in addition to all other remedies available to it at law or in equity.
Section 6.15 STOCKHOLDER APPROVAL; EXCHANGE CAP. Notwithstanding anything in this Agreement to the contrary, the Company shall not issue, and the Investor shall not be entitled to receive or require the issuance of, any shares of Class A Common Stock under this Agreement (including, without limitation, any Put Shares or Commitment Shares) to the extent that, after giving effect to such issuance, the aggregate number of shares of Class A Common Stock issued pursuant to this Agreement would exceed the Exchange Cap, unless and until the Company obtains Stockholder Approval. The Company shall use its reasonable best efforts to obtain Stockholder Approval as promptly as practicable, and, if and to the extent required by the applicable rules of the Principal Market, shall include a proposal to approve the issuance of shares of Class A Common Stock under this Agreement in excess of the Exchange Cap (together with any other matters constituting Required Stockholder Approvals under the Securities Purchase Agreement) at a meeting of the Company’s stockholders held for such purpose. If such Stockholder Approval is not obtained at such meeting, the Company shall cause a meeting of its stockholders to be held to seek such Stockholder Approval as promptly as practicable thereafter, and, if such Stockholder Approval is not then obtained, shall cause an additional meeting of its stockholders to be held to seek such Stockholder Approval every 20 days thereafter, and shall in each case use its best efforts to obtain such Stockholder Approval, until such Stockholder Approval is obtained.
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ARTICLE VII
CONDITIONS TO DELIVERY OF PUT NOTICES AND CONDITIONS TO CLOSING
Section 7.1 CONDITIONS PRECEDENT TO THE OBLIGATION OF INVESTOR TO PURCHASE PUT SHARES. The obligation of the Investor hereunder to purchase Put Shares is subject to the satisfaction of each of the following conditions:
(a) REGISTRATION STATEMENT. The Registration Statement, and any amendment or supplement thereto, shall be and remain effective for the resale by the Investor of the Put Shares and the Commitment Shares and (i) neither the Company nor the Investor shall have received notice that the SEC has issued or intends to issue a stop order with respect to such Registration Statement or that the SEC otherwise has suspended or withdrawn the effectiveness of such Registration Statement, either temporarily or permanently, or intends or has threatened to do so and (ii) no other suspension of the use of, or withdrawal of the effectiveness of, such Registration Statement or related prospectus shall exist. The Company shall have prepared and filed with the SEC a final and complete prospectus (the preliminary form of which shall be included in the Registration Statement) and shall have delivered to the Investor a true and complete copy thereof. Such prospectus shall be current and available for the resale by the Investor of all of the Securities covered thereby.
(b) ACCURACY OF THE COMPANY’S REPRESENTATIONS AND WARRANTIES. The representations and warranties of the Company shall be true and correct in all material respects as of the Execution Date, each date a Put Notice is submitted, and as of the date of each Closing (except for representations and warranties under the first sentence of Section 4.3, which are specifically made as of the Execution Date and shall be true and correct in all respects as of the Execution Date).
(c) PERFORMANCE BY THE COMPANY. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company.
(d) NO INJUNCTION. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or adopted by any court or governmental authority of competent jurisdiction that prohibits or directly and materially adversely affects any of the transactions contemplated by the Transaction Documents, and no proceeding shall have been commenced that may have the effect of prohibiting or materially adversely affecting any of the transactions contemplated by the Transaction Documents.
(e) ADVERSE CHANGES. Since the date of filing of the Company’s most recent SEC Document, no event that had or is reasonably likely to have a Material Adverse Effect has occurred.
(f) NO SUSPENSION OF TRADING IN OR DELISTING OF THE CLASS A COMMON STOCK. Trading of the Class A Common Stock shall not have been suspended by the SEC, the Principal Market or FINRA, or otherwise halted for any reason, and the Class A Common Stock shall have been approved for listing or quotation on and shall not have been delisted from the Principal Market. In the event of a suspension, delisting, or halting for any reason, of the trading of the Class A Common Stock, as contemplated by this Section 7.1(f), while a Regular Put Notice is outstanding, the Investor shall have the right to return to the Company any remaining amount of Put Shares associated with such Put, and the Investment Amount with respect to such Put shall be reduced accordingly. In the event of a suspension, delisting, or halting of the trading of the Class A Common Stock for any time period while an Intraday Put Notice is outstanding, the Investor shall have the right to return to the Company any remaining amount of Put Shares associated with such Intraday Put, and the Investment Amount with respect to such Intraday Put shall be reduced accordingly.
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(g) BENEFICIAL OWNERSHIP LIMITATION. As of the date of the Closing for such issuance and sale, the number of Put Shares to be purchased by the Investor shall not exceed the number of such shares that, when aggregated with all other Class A Common Stock then beneficially owned or deemed beneficially owned by the Investor and its Affiliates, would result in the Investor and its Affiliates owning more than the Beneficial Ownership Limitation (as defined below), as determined in accordance with Section 13(d) of the Exchange Act and the regulations promulgated thereunder. For purposes of this Section 7.1(g), in the event that the amount of Class A Common Stock outstanding, as determined in accordance with Section 13(d) of the Exchange Act and the regulations promulgated thereunder, is greater on a Closing Date than on the date upon which the Put Notice associated with such Closing Date is given, the amount of Class A Common Stock outstanding on such Closing Date shall govern for purposes of determining whether the Investor, when aggregating all purchases of Class A Common Stock made pursuant to this Agreement, would own more than the Beneficial Ownership Limitation following such Closing Date. The “Beneficial Ownership Limitation” shall be 4.99% of the number of Class A Common Stock outstanding immediately after giving effect to the issuance of Class A Common Stock issuable pursuant to a Put Notice. The Investor, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 7.1(g), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of Class A Common Stock outstanding immediately after giving effect to the issuance of Class A Common Stock issuable pursuant to a Put Notice and the provisions of this Section 7.1(g) 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.
(h) NO KNOWLEDGE. The Company shall have no knowledge of any event more likely than not to have the effect of causing the Registration Statement to be suspended or otherwise ineffective (which event is more likely than not to occur within the fifteen (15) Trading Days following the Trading Day on which such Put Notice is deemed delivered). The Company shall have no knowledge of any untrue statement (or alleged untrue statement) of a material fact or omission (or alleged omission) of 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, in the Registration Statement, any effective registration statement filed pursuant to the Registration Rights Agreement or any post-effective amendment or prospectus which is a part of the foregoing, unless the Company has filed an amendment to the Registration Statement or made a filing pursuant to Section 13(a) or 15(d) of the Exchange Act with the SEC.
(i) NO VIOLATION OF STOCKHOLDER APPROVAL REQUIREMENT. The issuance of the Put Shares shall not violate the stockholder approval requirements of the Principal Market, if any.
(j) DWAC ELIGIBLE. The Class A Common Stock must be DWAC Eligible and not subject to a “DTC chill.”
(k) SEC DOCUMENTS. All reports, schedules, registrations, forms, statements, information and other documents required to have been filed by the Company with the SEC pursuant to the reporting requirements of the Exchange Act (other than Current Reports on Form 8-K) shall have been filed with the SEC within the applicable time periods prescribed for such filings under the Exchange Act.
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(l) TRANSFER AGENT INSTRUCTION LETTER. The Transfer Agent Instruction Letter shall have been executed and delivered by the Company to the Transfer Agent and acknowledged and agreed to in writing by the Transfer Agent, and the Company shall have no knowledge of any fact or circumstance that would prevent the Transfer Agent from complying with the terms of the Transfer Agent Instruction Letter.
(m) BROKER APPROVAL. The Put Shares shall have been approved by the Investor’s prime broker or designated clearing firm for deposit to its account with the Depository Trust Company system.
(n) NO VIOLATION. No statute, regulation, order, guidance, decree, writ, ruling or injunction shall have been enacted, entered, promulgated, threatened or endorsed by any federal, state, local or foreign court or governmental authority of competent jurisdiction, including, without limitation, the SEC, which prohibits the consummation of or which would materially modify or delay any of the transactions contemplated by the Transaction Documents.
(o) LEGAL OPINION. The Company shall cause to be delivered to the Investor a written opinion or opinions of counsel reasonably satisfactory to the Investor, in form and substance reasonably satisfactory to the Investor and its counsel, relating to the availability and effectiveness of the Registration Statement, as supplemented by any prospectus supplement or amendment thereto, and regarding the Company’s compliance with the laws of the State of Nevada and the federal securities laws of the United States in the issuance, sale and registration of the Put Shares and Commitment Shares and entrance into the transaction documents.
(p) NO NON-PUBLIC INFORMATION. Neither the Investor nor any of its agents or counsel shall be in possession of any information that constitutes or might constitute material, non-public information with respect to the Company.
(q) COMMITMENT SHARES ISSUED AS DWAC SHARES. Following the effectiveness of the Registration Statement any Class A Common Stock issuable to the Investor pursuant to Section 6.4 shall have been credited by the Transfer Agent to the Investor’s or its designee’s account at DTC as DWAC Shares.
(r) NO TRIGGERING EVENT. No Triggering Event shall have occurred and be continuing.
ARTICLE VIII
LEGENDS
Section 8.1 NO RESTRICTIVE STOCK LEGEND. No restrictive stock legend shall be placed on the share certificates representing the Put Shares.
Section 8.2 INVESTOR’S COMPLIANCE. Nothing in this Article VIII shall affect in any way the Investor’s obligations hereunder to comply with all applicable securities laws upon the sale of the Class A Common Stock.
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ARTICLE IX
NOTICES; INDEMNIFICATION
Section 9.1 NOTICES. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be delivered via email (including Put Notices, which shall be delivered in accordance with Sections 2.1 and 2.2), and, unless otherwise specified herein, a supplemental notice may also be (a) personally served, (b) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (c) delivered by a nationally recognized overnight delivery service with charges prepaid, or (d) transmitted by hand delivery, telegram, or e-mail as a PDF, addressed as set forth below or to such other address as such party shall have specified most recently by written notice given in accordance herewith. Any notice or other communication required or permitted to be given hereunder shall be deemed effective upon delivery by e-mail at the e-mail address(es) designated below (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party) on the same day as delivered (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received).
The addresses for such communications shall be:
If to the Company:
Boxlight Corporation
2750 Premiere Parkway, Suite 900
Duluth, Georgia 30097
Attention: Ryan Zeek, Chief Financial Officer
E-mail: [email protected]
With a copy (which shall not constitute notice) to:
Lucosky Brookman LLP
111 Broadway, Suite 807
New York, New York 10006
Attention: Edward Welch
Email: [email protected]
If to the Investor:
[ ]
[ ]
Attention: [ ]
E-mail: [ ]
With a copy (which shall not constitute notice) to:
Either party hereto may from time to time change
its address or e-mail for notices under this Section
9.1 by giving at least ten (10) days’ prior written
notice of such changed address to the other party
hereto.
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Section 9.2 INDEMNIFICATION. The Company (an “Indemnifying Party”) agrees to indemnify and hold harmless the Investor along with its Affiliates and their respective officers, directors, employees, and authorized agents and representatives, and each Person or entity, if any, who controls such party within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act or the rules and regulations thereunder (an “Indemnified Party”) from and against any and all Damages, joint or several, and any and all actions in respect thereof to which the Indemnified Party becomes subject to, resulting from, arising out of or relating to (i) any misrepresentation, breach of warranty or nonfulfillment of or failure to perform any covenant or agreement on the part of the Indemnifying Party contained in this Agreement, (ii) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, any registration statement pursuant to the Registration Rights Agreement or any post-effective amendment thereof or supplement thereto, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, (iii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in the light of the circumstances under which the statements therein were made, not misleading, or (iv) any material violation or alleged material violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation under the Securities Act, the Exchange Act or any state securities law, as such Damages are incurred, except to the extent such Damages result solely from the Indemnified Party’s gross negligence, fraud, or willful misconduct in performing its obligations under this Agreement (in each case as determined by a final non-appealable judgment of a court having jurisdiction over such matter); provided, however, that the foregoing indemnity agreement shall not apply to any Damages of an Indemnified Party to the extent, but only to the extent, (a) arising out of or based upon any untrue statement or alleged untrue statement or omission or alleged omission made by an Indemnifying Party in reliance upon and in conformity with written information furnished to the Indemnifying Party by the Indemnified Party expressly for use in the Registration Statement, or any post-effective amendment thereof or supplement thereto, or (b) resulting from the fraud or willful misconduct of the Indemnified Party (as determined by a final non-appealable judgment of court having jurisdiction over such matter).
In addition to and without limiting the foregoing, the indemnity provided in this Section 9.2 is intended to, and shall also, cover any action or proceeding instituted against any Indemnified Party in any capacity (including such Indemnified Party’s status as an investor in, or holder of securities of, the Company), or against any of their respective Affiliates, by the Company or by any stockholder of the Company who is not an Affiliate of such Indemnified Party, arising out of or relating to any of the transactions contemplated by the Transaction Documents, and for the avoidance of doubt shall also cover direct claims brought by the Company against any Indemnified Party; provided that such indemnity shall not cover any Damages to the extent finally judicially determined by a court of competent jurisdiction to have resulted from such Indemnified Party’s material breach of the Transaction Documents or from such Indemnified Party’s fraud, gross negligence or willful misconduct. The Company shall reimburse each Indemnified Party promptly, and in any event within five (5) business days following written demand, for all Damages (including reasonable attorneys’ fees and other costs and expenses) as they are incurred in connection with investigating, preparing, pursuing, defending or settling any such action, claim or proceeding, whether or not pending or threatened and whether or not such Indemnified Party is a party thereto; provided that if any Indemnified Party is finally judicially determined not to be entitled to indemnification hereunder, such Indemnified Party shall promptly reimburse the Company for any amounts so advanced. If any Indemnified Party takes any action to enforce the provisions of, or to collect any amounts due under, any Transaction Document, the Company shall pay the reasonable and actual costs and expenses (including attorneys’ fees and disbursements) incurred by such Indemnified Party in connection therewith. The indemnification and payment obligations of the Company under this Section 9.2 shall be in addition to any other liability the Company may otherwise have to any Indemnified Party, shall not be limited by any other provision of the Transaction Documents, and shall remain operative and in full force and effect regardless of any investigation made by or on behalf of any Indemnified Party and regardless of any termination of this Agreement.
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Section 9.3 METHOD OF ASSERTING INDEMNIFICATION CLAIMS. All claims for indemnification by any Indemnified Party under Section 9.2 shall be asserted and resolved as follows:
(a) In the event any claim or demand in respect of which an Indemnified Party might seek indemnity under Section 9.2 is asserted against or sought to be collected from such Indemnified Party by a Person other than a party hereto or an Affiliate thereof (a “Third Party Claim”), the Indemnified Party shall deliver a written notification, enclosing a copy of all papers served, if any, and specifying the nature of and basis for such Third Party Claim and for the Indemnified Party’s claim for indemnification that is being asserted under any provision of Section 9.2 against an Indemnifying Party, together with the amount or, if not then reasonably ascertainable, the estimated amount, determined in good faith, of such Third Party Claim (a “Claim Notice”) with reasonable promptness to the Indemnifying Party. If the Indemnified Party fails to provide the Claim Notice with reasonable promptness after the Indemnified Party receives notice of such Third Party Claim, the Indemnifying Party shall not be obligated to indemnify the Indemnified Party with respect to such Third Party Claim to the extent that the Indemnifying Party’s ability to defend has been prejudiced by such failure of the Indemnified Party. The Indemnifying Party shall notify the Indemnified Party as soon as practicable within the period ending fifteen (15) calendar days following receipt by the Indemnifying Party of either a Claim Notice or an Indemnity Notice (as defined below) (the “Dispute Period”) whether the Indemnifying Party disputes its liability or the amount of its liability to the Indemnified Party under Section 9.2 and whether the Indemnifying Party desires, at its sole cost and expense, to defend the Indemnified Party against such Third Party Claim.
(i) If the Indemnifying Party notifies the Indemnified Party within the Dispute Period that the Indemnifying Party desires to defend the Indemnified Party with respect to the Third Party Claim pursuant to this Section 9.3(a), then the Indemnifying Party shall have the right to defend, with counsel reasonably satisfactory to the Indemnified Party, at the sole cost and expense of the Indemnifying Party, such Third Party Claim by all appropriate proceedings, which proceedings shall be vigorously and diligently prosecuted by the Indemnifying Party to a final conclusion or will be settled at the discretion of the Indemnifying Party (but only with the consent of the Indemnified Party in the case of any settlement that (A) provides for any relief other than the payment of monetary damages, (B) provides for the payment of monetary damages as to which the Indemnified Party shall not be indemnified in full pursuant to Section 9.2, or (C) does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect of such Third Party Claim). The Indemnifying Party shall have full control of such defense and proceedings, including any compromise or settlement thereof; provided, however, that the Indemnified Party may, at the sole cost and expense of the Indemnified Party, at any time prior to the Indemnifying Party’s delivery of the notice referred to in the first sentence of this Section 9.3(b), file any motion, answer or other pleadings or take any other action that the Indemnified Party reasonably believes to be necessary or appropriate to protect its interests; and provided, further, that if requested by the Indemnifying Party, the Indemnified Party will, at the sole cost and expense of the Indemnifying Party, provide reasonable cooperation to the Indemnifying Party in contesting any Third Party Claim that the Indemnifying Party elects to contest. The Indemnified Party may participate in, but not control, any defense or settlement of any Third Party Claim controlled by the Indemnifying Party pursuant to this Section 9.3(b), and except as provided in the preceding sentence, the Indemnified Party shall bear its own costs and expenses with respect to such participation. Notwithstanding the foregoing, the Indemnified Party may take over the control of the defense or settlement of a Third Party Claim at any time if (i) the Indemnifying Party fails to diligently prosecute such defense, (ii) there exists a conflict of interest between the Indemnifying Party and the Indemnified Party with respect to such Third Party Claim, or (iii) the Indemnified Party reasonably determines that the conduct of the defense by the Indemnifying Party could be materially prejudicial to the interests of the Indemnified Party, in each case without waiving any right to indemnity under Section 9.2 with respect to such Third Party Claim.
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(ii) If the Indemnifying Party fails to notify the Indemnified Party within the Dispute Period that the Indemnifying Party desires to defend the Third Party Claim pursuant to this Section 9.3(a), or if the Indemnifying Party gives such notice but fails to prosecute vigorously and diligently or settle the Third Party Claim, or if the Indemnifying Party fails to give any notice whatsoever within the Dispute Period, then the Indemnified Party shall have the right to defend, at the sole cost and expense of the Indemnifying Party, the Third Party Claim by all appropriate proceedings, which proceedings shall be prosecuted by the Indemnified Party in a reasonable manner and in good faith or will be settled at the discretion of the Indemnified Party (with the consent of the Indemnifying Party, which consent will not be unreasonably withheld). The Indemnified Party will have full control of such defense and proceedings, including any compromise or settlement thereof; provided, however, that if requested by the Indemnified Party, the Indemnifying Party will, at the sole cost and expense of the Indemnifying Party, provide reasonable cooperation to the Indemnified Party and its counsel in contesting any Third Party Claim which the Indemnified Party is contesting. Notwithstanding the foregoing provisions of this Section 9.3(c), if the Indemnifying Party has notified the Indemnified Party within the Dispute Period that the Indemnifying Party disputes its liability or the amount of its liability hereunder to the Indemnified Party with respect to such Third Party Claim and if such dispute is resolved in favor of the Indemnifying Party in the manner provided in Section 9.3(d) below, the Indemnifying Party will not be required to bear the costs and expenses of the Indemnified Party’s defense pursuant to this Section 9.3(c) or of the Indemnifying Party’s participation therein at the Indemnified Party’s request, and the Indemnified Party shall reimburse the Indemnifying Party in full for all reasonable costs and expenses incurred by the Indemnifying Party in connection with such litigation. The Indemnifying Party may participate in, but not control, any defense or settlement controlled by the Indemnified Party pursuant to this Section 9.3(c), and the Indemnifying Party shall bear its own costs and expenses with respect to such participation.
(iii) If the Indemnifying Party notifies the Indemnified Party that it does not dispute its liability or the amount of its liability to the Indemnified Party with respect to the Third Party Claim under Section 9.2 or fails to notify the Indemnified Party within the Dispute Period whether the Indemnifying Party disputes its liability or the amount of its liability to the Indemnified Party with respect to such Third Party Claim, the amount of Damages specified in the Claim Notice shall be conclusively deemed a liability of the Indemnifying Party under Section 9.2 and the Indemnifying Party shall pay the amount of such Damages to the Indemnified Party on demand. If the Indemnifying Party has timely disputed its liability or the amount of its liability with respect to such Third Party Claim, the Indemnifying Party and the Indemnified Party shall proceed in good faith to negotiate a resolution of such dispute; provided, however, that if the dispute is not resolved within thirty (30) days after the Claim Notice, the Indemnifying Party shall be entitled to institute such legal action as it deems appropriate.
(b) In the event any Indemnified Party should have a claim under Section 9.2 against the Indemnifying Party that does not involve a Third Party Claim, the Indemnified Party shall deliver a written notification of a claim for indemnity under Section 9.2 specifying the nature of and basis for such claim, together with the amount or, if not then reasonably ascertainable, the estimated amount, determined in good faith, of such claim (an “Indemnity Notice”) with reasonable promptness to the Indemnifying Party. The failure by any Indemnified Party to give the Indemnity Notice shall not impair such party’s rights hereunder except to the extent that the Indemnifying Party demonstrates that it has been irreparably prejudiced thereby. If the Indemnifying Party notifies the Indemnified Party that it does not dispute the claim or the amount of the claim described in such Indemnity Notice or fails to notify the Indemnified Party within the Dispute Period whether the Indemnifying Party disputes the claim or the amount of the claim described in such Indemnity Notice, the amount of Damages specified in the Indemnity Notice will be conclusively deemed a liability of the Indemnifying Party under Section 9.2 and the Indemnifying Party shall pay the amount of such Damages to the Indemnified Party on demand. If the Indemnifying Party has timely disputed its liability or the amount of its liability with respect to such claim, the Indemnifying Party and the Indemnified Party shall proceed in good faith to negotiate a resolution of such dispute; provided, however, that if the dispute is not resolved within thirty (30) days after the Indemnity Notice, either party shall be entitled to institute such legal action as it deems appropriate.
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(c) The Indemnifying Party agrees to advance and pay the Indemnified Party, as promptly as possible but in any event within five (5) days as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such claim, regardless of whether the Indemnifying Party has disputed its liability hereunder; provided, however, that in the event it is finally determined by a court of competent jurisdiction that the Indemnifying Party has no liability with respect to such Claim, the Indemnified Party shall promptly reimburse the Indemnifying Party for all amounts so advanced.
(d) The indemnity provisions contained herein shall be in addition to (i) any cause of action or similar rights of the Indemnified Party against the Indemnifying Party or others, and (ii) any liabilities the Indemnifying Party may be subject to.
ARTICLE X
MISCELLANEOUS
Section 10.1 GOVERNING LAW. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Nevada without regard to the principles of conflicts of law (whether of the State of Nevada or any other jurisdiction).
Section 10.2 ARBITRATION. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors, officers, stockholders, employees or agents) shall be commenced exclusively by arbitration be administered by Mediation and Civil Arbitration, Inc. d/b/a RapidRuling (www.rapidruling.com) in accordance with its Commercial Arbitration Rules effective at the time a claim is made (the “Rules”), and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. Arbitrators shall be appointed by RapidRuling. The place of arbitration shall be New York, New York, and any hearing shall be held via video or telephone conference. The parties hereto agree that no objection shall be taken to the decision, order or award of the tribunal following any such hearing on the basis that the hearing was held by video or telephone conference. The parties hereto consent to electronic service of process, with service to be made to the following email addresses the Company: [email protected], with a copy to [email protected], and Investor: [ ]. All such service of process may come from the opposing party’s email listed here, [email protected]. The parties hereto shall list all said email addresses as “safe senders” (or other whitelist) and are responsible to check their “SPAM” and “junk” type incoming messages on a daily basis. In any such arbitration award, the arbitrator shall require the breaching party (if any), as finally determined by the arbitrator, to pay the non-breaching Party’s costs and expenses (including such nonbreaching party’s reasonable attorneys’ fees, arbitration costs, court costs, and other expenses) associated with enforcing the Agreement and collecting any judgment related thereto. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement.
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Section 10.3 JURY TRIAL WAIVER. THE COMPANY AND THE INVESTOR HEREBY WAIVE A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER IN RESPECT OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THE TRANSACTION DOCUMENTS.
Section 10.4 ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the Company and the Investor and their respective successors. Neither this Agreement nor any rights of the Investor or the Company hereunder may be assigned by either party to any other Person; provided, however, that the Investor may assign this Agreement or any of its rights hereunder to any Affiliate of the Investor without the prior written consent of the Company, so long as such assignee agrees in writing to be bound by the terms and conditions of this Agreement.
Section 10.5 NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the benefit of the Company and the Investor and their respective successors, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as set forth in Article IX.
Section 10.6 TERMINATION. This Agreement shall automatically terminate on the earlier of (i) the end of the Commitment Period; or (ii) the date that the Company sells and the Investor purchases the Maximum Commitment Amount. In addition, the Company may terminate this Agreement upon written notice to the Investor; provided, that the Company may not terminate this Agreement pursuant to this sentence unless and until (i) no shares of Preferred Stock remain issued and outstanding and (ii) all Commitment Shares required to be issued hereunder, including all True-Up Commitment Shares, have been issued and delivered to the Investor (or, to the extent the Investor has elected to receive Pre-Funded Warrants in lieu thereof, such Pre-Funded Warrants have been issued and delivered to the Investor). Furthermore, the Investor may terminate this Agreement upon written notice to the Company if, pursuant to or within the meaning of any Bankruptcy Law, the Company commences a voluntary case or any Person commences a proceeding against the Company, a Custodian is appointed for the Company or for all or substantially all of its property or the Company makes a general assignment for the benefit of its creditors. If the Company receives a final, non-appealable delisting notice from the Principal Market or if the Class A Common Stock fails to be listed on an Eligible Market, then the Investor may terminate its obligations under this Agreement by written notice to the Company and may deem any outstanding Put Notice as withdrawn. Notwithstanding the foregoing, in the event of termination of this Agreement, the provisions of Articles III, IV, IX and the agreements and covenants of the Company and the Investor set forth in this Article X shall survive the termination of this Agreement for the maximum length of time allowed under applicable law.
Section 10.7 ENTIRE AGREEMENT. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the Company and the Investor with respect to the matters covered herein and therein 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.
Section 10.8 FEES AND EXPENSES. Except as expressly set forth in the Transaction Documents or any other writing 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. For the avoidance of doubt, the Company shall pay all Transfer Agent fees, Clearing Costs, stamp taxes and other taxes and duties levied in connection with any Securities.
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Section 10.9 COUNTERPARTS. This Agreement may be executed in multiple counterparts, each of which may be executed by less than all of the parties and shall be deemed to be an original instrument which shall be enforceable against the parties actually executing such counterparts and all of which together shall constitute one and the same instrument. This Agreement may be delivered to the other parties hereto by e-mail of a copy of this Agreement bearing the signature of the parties so delivering this Agreement.
Section 10.10 SEVERABILITY. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision; provided that such severability shall be ineffective if it materially changes the economic benefit of this Agreement to any party.
Section 10.11 FURTHER ASSURANCES. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
Section 10.12 NO STRICT CONSTRUCTION. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.
Section 10.13 EQUITABLE RELIEF. Each party acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the other by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, each party acknowledges that the remedy at law for a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by the such party of the provisions of this Agreement, that the other party shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing economic loss and without any bond or other security being required.
Section 10.14 TITLE AND SUBTITLES. The titles and subtitles used in this Agreement are used for the convenience of reference and are not to be considered in construing or interpreting this Agreement.
Section 10.15 AMENDMENTS; WAIVERS. No provision of this Agreement may be amended or waived by the parties from and after the date that is one (1) Trading Day immediately preceding the initial filing of the Registration Statement with the SEC. Subject to the immediately preceding sentence, (i) no provision of this Agreement may be amended other than by a written instrument signed by both parties hereto and (ii) no provision of this Agreement may be waived other than in a written instrument signed by the party against whom enforcement of such waiver is sought. No failure or delay 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
Section 10.16 PUBLICITY. The Company and the Investor shall consult with each other in issuing any press releases or otherwise making public statements with respect to the transactions contemplated hereby and no party shall issue any such press release or otherwise make any such public statement, other than as required by law, without the prior written consent of the other parties, which consent shall not be unreasonably withheld or delayed, except that no prior consent shall be required if such disclosure is required by law, in which such case the disclosing party shall provide the other party with prior notice of such public statement. Notwithstanding the foregoing, the Company shall not publicly disclose the name of the Investor without the prior written consent of the Investor, except to the extent required by law. The Investor acknowledges that this Agreement and all or part of the Transaction Documents may be deemed to be “material contracts,” as that term is defined by Item 601(b)(10) of Regulation S-K, and that the Company may therefore be required to file such documents as exhibits to reports or registration statements filed under the Securities Act or the Exchange Act. The Investor further agrees that the status of such documents and materials as material contracts shall be determined solely by the Company, in consultation with its counsel.
** Signature Page Follows **
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their respective officers thereunto duly authorized as of the Execution Date.
| BOXLIGHT CORPORATION | ||
| By: | ||
| Name: | [●] | |
| Title: | [●] | |
| [ ] | ||
| By: | ||
| Name: | [●] | |
| Title: | [●] | |
** Signature Page to Equity Purchase Agreement **
EXHIBIT A
FORM OF REGULAR PUT NOTICE
TO: [ ]
| DATE:_________________ | REGULAR PUT NOTICE NUMBER:_____________ |
We refer to the Equity Purchase Agreement, dated August 5, 2026 (the “Agreement”), entered into by and between Boxlight Corporation and you. Capitalized terms defined in the Agreement shall, unless otherwise defined herein, have the same meaning when used herein.
We hereby:
| 1) | Notify you that the Maximum Regular Put Amount as of the delivery of this Regular Put Notice is _________. |
| 2) | Give you notice that: |
[___] we require you to purchase Put Shares in an amount equal to _________ , which is not in excess of the Maximum Regular Put Amount; OR
[__] we request that you purchase an amount of Put Shares equal to _________ (the “Excess Purchase Amount”) which is in excess of the Maximum Regular Put Amount
If we have requested that you purchase in excess of the Maximum Regular Put Amount, prior to the opening of trading on the Trading Day immediately following the delivery of this Put Notice please confirm if you will purchase the Maximum Regular Put Amount, the Excess Purchase Amount or some amount of Put Shares between the Maximum Regular Put Amount and the Excess Purchase Amount and what amount. Failure to so confirm will be deemed confirmation that you elect to purchase the Maximum Regular Put Amount.
| 3) | Certify that, as of the date hereof, the conditions set forth in Section 7.1 of the Agreement are satisfied. The representations and warranties of the Company contained in the Agreement are true and correct in all material respects as of the date hereof as though made on and as of such date (except for representations and warranties that speak as of a specific date, which were true and correct in all material respects as of such date. |
| 4) | We will deliver an executed Transfer Agent Instruction Letter to the Transfer Agent promptly upon our receipt of your confirmation of the validity of this Regular Put Notice, and we hereby confirm that the Company has no knowledge of any fact or circumstance that would prevent the Transfer Agent from complying with such Transfer Agent Instruction Letter, once delivered. |
BOXLIGHT CORPORATION
| By: | ||
| Name: | ||
| Title: |
EXHIBIT B
FORM OF INTRADAY PUT NOTICE
TO: [ ]
| DATE: _________ (the “Trading Day”) | INTRADAY PUT NOTICE NUMBER:_______ |
We refer to the Equity Purchase Agreement, dated August 5, 2026 (the “Agreement”), entered into by and between Boxlight Corporation and you. Capitalized terms defined in the Agreement shall, unless otherwise defined herein, have the same meaning when used herein.
We hereby:
| 1) | Notify you that the Maximum Intraday Put Amount as of the delivery of this Intraday Put Notice is _________. |
| 2) | Request that you accept this Intraday Put Notice pursuant to the terms of Section 2.2(a) of the Agreement; specifically, we request that, prior to the close of this Trading Day, you purchase Intraday Put Shares in an amount equal to _________, to be issued and priced in accordance with the provisions of Section 2.2 of the Agreement. |
| 3) | Certify that this is the ___ Intraday Put Notice submitted to you on this Trading Day, and with respect to all Put Notices, including all Intraday Put Notices, previously submitted by us and accepted by you on this Trading Day, valid instructions have been submitted to the TA for all prior notices. |
| 4) | Certify that, as of the date hereof, the conditions set forth in Section 7.1 of the Agreement are satisfied. We further certify that the representations and warranties of the Company contained in the Agreement are true and correct in all material respects as of the date hereof as though made on and as of such date (except for representations and warranties that speak as of a specific date, which were true and correct in all material respects as of such date. |
| 5) | We will deliver an executed Transfer Agent Instruction Letter to the Transfer Agent promptly upon our receipt of your confirmation of the validity of this Intraday Put Notice, and we hereby confirm that the Company has no knowledge of any fact or circumstance that would prevent the Transfer Agent from complying with such Transfer Agent Instruction Letter, once delivered. |
If we do not receive your acceptance of this Intraday Put Notice within 30 minutes of your receipt hereof, this Intraday Put Notice shall be deemed rejected and of no further force or effect.
BOXLIGHT CORPORATION
| By: | |||
| Name: | |||
| Title: | |||
ACCEPTED:
[ ]
| By: | |||
| Name: | |||
| Title: | |||
EXHIBIT C
FORM OF REGISTRATION RIGHTS AGREEMENT
EXHIBIT D
FORM
OF TRANSFER AGENT
INSTRUCTION LETTER
Exhibit 10.7
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.
PRE-FUNDED WARRANT TO PURCHASE CLASS A COMMON STOCK
BOXLIGHT CORPORATION
| Warrant Shares: | Initial Exercise Date: August 5, 2026 |
| Issuance Date: August 5, 2026 |
THIS PRE-FUNDED WARRANT TO PURCHASE CLASS A COMMON STOCK (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 until this Warrant is exercised in full (the “Termination Date”), to subscribe for and purchase from Boxlight Corporation, a Nevada corporation (the “Company”), up to 48,702 shares (as subject to adjustment hereunder, the “Warrant Shares”) of Class A Common Stock. The purchase price of one (1) share of Class A Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2.2.
| 1. | Definitions. In addition to the terms defined elsewhere in this Warrant or in the Equity Purchase Agreement dated August 5, 2026, by and between the Company and the investor (the “Investor”) referred to therein (the “Purchase Agreement”), the following terms have the meanings indicated in this Section 1: |
| 1.1. | “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. |
| 1.2. | “Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Class A Common Stock are then listed or quoted on a Trading Market, the bid price of the Class A Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which the Class A Common Stock are 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 Class A Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Class A Common Stock are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Class A 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 Class A Common Stock so reported, or (d) in all other cases, the fair market value of a share of Class A Common Stock as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company. |
| 1.3. | “Board of Directors” means the board of directors of the Company. |
| 1.4. | “Business Day” means a Calendar Day other than a Saturday, Sunday or any other Calendar Day which is a federal legal holiday in the United States or any Calendar Day on which the commercial banks in the City of New York are required by law or other governmental action to close, provided that the commercial banks in the City of New York shall not be deemed to be required to be closed due to a “stay at home,” “shelter in place,” “non-essential employee” or 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 generally are open for use by customers on such Calendar Day. |
| 1.5. | “Calendar Day” means each and every day of the week (Sunday, Monday, Tuesday, Wednesday, Thursday, Friday and Saturday). |
| 1.6. | “Commission” means the United States Securities and Exchange Commission. |
| 1.7. | “Class A Common Stock” means the Class A common stock of the Company, $0.0001 par value per share, and any other class of securities into which such securities may hereafter be reclassified or changed. |
| 1.8. | “Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Class A 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, Class A Common Stock. |
| 1.9. | “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. |
| 1.10. | “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. |
| 1.11. | “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. |
| 1.12. | “Subsidiary” means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof. |
| 1.13. | “Trading Day” means a Calendar Day on which the principal Trading Market is open for trading. |
| 1.14. | “Trading Market” means any of the following markets or exchanges on which the Class A Common Stock are 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, OTCQB or OTCQX (or any successors to any of the foregoing); provided, that for purposes of this Warrant, the parties acknowledge that the Class A Common Stock are currently listed on the Nasdaq Capital Market. |
| 1.15. | “Transaction Documents” means the Purchase Agreement, the Warrant, the Securities Purchase Agreement dated as of the date hereof by and between the Company and the purchaser party thereto (the “Securities Purchase Agreement”), the Certificate of Designation (as defined in the Securities Purchase Agreement), the Escrow Agreement (as defined in the Securities Purchase Agreement), the Registration Rights Agreement, the Lock-Up Agreements (as defined in the Securities Purchase Agreement), the Transfer Agent Instruction Letter and all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder. |
| 1.16. | “Transfer Agent” means VStock Transfer, LLC, the current transfer agent of the Company, with a mailing address of 18 Lafayette Place, Woodmere, New York 11598, and any successor transfer agent of the Company. |
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| 1.17. | “VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Class A Common Stock are then listed or quoted on a Trading Market, the daily volume weighted average price of the Class A Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Class A Common Stock are 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 4:00 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Class A Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Class A Common Stock are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Class A 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 Class A Common Stock so reported, or (d) in all other cases, the fair market value of a share of Class A Common Stock as determined by an independent appraiser selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company. |
| 2. | Exercise. |
| 2.1. | 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 duly executed PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise substantially in the form attached hereto as Exhibit 2.1 (the “Notice of Exercise”). Within the earlier of (i) one (1) Trading Day and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2.4.1 herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the Warrant 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 2.3 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 three (3) Trading Days after 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) Trading Day after 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. |
| 2.2. | Exercise Price. The aggregate exercise price of this Warrant, except for a nominal exercise price of $0.0001 per Warrant Share, subject to adjustment hereunder (such nominal exercise price, the “Exercise Price”), was pre-funded to the Company on or prior to the Initial Exercise Date and, consequently, no additional consideration (other than such Exercise Price) shall be required to be paid by the Holder to any Person to effect any exercise of this Warrant. The Holder shall not be entitled to the return or refund of all, or any portion, of such pre-paid aggregate exercise price under any circumstance or for any reason whatsoever. |
| 2.3. | Cashless Exercise. This Warrant may also be exercised, in whole or in part, 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) delivered pursuant to Section 2.1 hereof on a Calendar Day that is not a Trading Day or (2) delivered pursuant to Section 2.1 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 highest Bid Price of the Class A Common Stock on the principal Trading Market as reported by Bloomberg L.P. within two (2) hours of the Holder’s delivery of the Notice of Exercise pursuant to Section 2.1 hereof if such Notice of Exercise is delivered during “regular trading hours,” or within two (2) hours after the close of “regular trading hours” on a Trading Day 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 delivered pursuant to Section 2.1 hereof two (2) or more hours following the close of “regular trading hours” on such Trading Day; |
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| (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. Without limiting any other provision in the Transaction Documents, assuming (i) the Holder is not an Affiliate of the Company, and (ii) all of the applicable conditions of Rule 144 promulgated under the Securities Act with respect to Holder and the Warrant Shares are met in the case of such a cashless exercise, the Company agrees that the Company will cause the removal of the legend from such Warrant Shares (including by delivering an opinion of the Company’s counsel to the Company’s transfer agent at its own expense to ensure the foregoing; provided that in the event such opinion cannot be provided by Company’s counsel, the opinion may be provided by counsel chosen by the Holder, in which case the Company shall be responsible for the reasonable costs of such counsel), and the Company agrees that the Holder is under no obligation to sell the Warrant Shares issuable upon the exercise of the Warrant prior to removing the legend. The Company agrees not to take any position contrary to this Section 2.3.
| 2.4. | Mechanics of Exercise. |
| 2.4.1. | 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 issuance of the Warrant Shares to or resale of the Warrant Shares by 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 or by electronic delivery (at the election of the Holder), 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 earlier of (i) one (1) Trading Day after the delivery to the Company of the Notice of Exercise and (ii) 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) one (1) Trading Day and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. Notwithstanding anything herein to the contrary, upon delivery of the Notice of Exercise, the Holder shall be deemed for purposes of Regulation SHO under the Exchange Act to have become the holder of the Warrant Shares irrespective of the date of delivery of the Warrant Shares. 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 Class A Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the third (3rd) 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 Class A Common Stock as in effect on the date of delivery of the Notice of Exercise. Notwithstanding the foregoing, with respect to any Notice(s) of Exercise delivered on or prior to 12:00 p.m. (New York City time) on the Initial Exercise Date, which may be delivered at any time after the time of execution of the Purchase Agreement, the Company agrees to deliver the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Initial Exercise Date and the Initial Exercise Date shall be the Warrant Share Delivery Date for purposes hereunder, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received by such Warrant Share Delivery Date. |
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| 2.4.2. | 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. |
| 2.4.3. | Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2.4.1 by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise. |
| 2.4.4. | 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 2.4.1 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, Class A 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 Class A 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 and return any amount received by the Company in respect of the Exercise Price for those Warrant Shares (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of Class A 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 Class A Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of Warrants 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 Class A Common Stock upon exercise of the Warrant as required pursuant to the terms hereof. |
| 2.4.5. | 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. |
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| 2.4.6. | 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 as Exhibit 2.4.6 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-Trading 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-Trading Day electronic delivery of the Warrant Shares. |
| 2.4.7. | 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. |
| 2.5. | 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 Class A Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of Class A Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of Class A Common Stock which would be issuable upon (i) exercise of the remaining, unexercised 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 unconverted 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 2.5, 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 2.5 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 2.5, in determining the number of outstanding Class A Common Stock, a Holder may rely on the number of outstanding Class A 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 Class A Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of Class A Common Stock then outstanding. In any case, the number of outstanding Class A 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 Class A Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% (or, upon election by a Holder prior to the issuance of any Warrants, 9.99%) of the number of Class A Common Stock outstanding immediately after giving effect to the issuance of Class A 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 2.5, provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of Class A Common Stock outstanding immediately after giving effect to the issuance of Class A Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2.5 shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until 61 Calendar Days 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 2.5 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. |
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| 3. | Certain Adjustments |
| 3.1. | 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 Class A Common Stock or any other equity or equity equivalent securities payable in Class A Common Stock (which, for avoidance of doubt, shall not include any Class A Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding Class A Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding Class A Common Stock into a smaller number of shares, or (iv) issues by reclassification of Class A 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 Class A Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of Class A 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 3.1 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. |
| 3.2. | Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3.1 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 all (or substantially all) of the record holders of any class of Class A 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 Class A 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 Class A 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 Class A 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). |
| 3.3. | 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 all (or substantially all) holders of Class A 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 Class A 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 Class A 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 Class A 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). To the extent that this Warrant has not been partially or completely exercised at the time of such Distribution, such portion of the Distribution shall be held in abeyance for the benefit of the Holder until the Holder has exercised this Warrant. |
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| 3.4. | 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 Class A 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 Class A 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 Class A Common Stock or any compulsory share exchange pursuant to which the Class A Common Stock are 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 Class A 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 2.5 on the exercise of this Warrant), the number of Class A 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 Class A Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2.5 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 Class A 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 Class A 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. 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 3.4 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 that is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the Class A 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 Class A Common Stock prior 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 be added to 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 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 Warrant 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 herein. For the avoidance of doubt, the Holder shall be entitled to the benefits of the provisions of this Section 3.4 regardless of (i) whether the Company has sufficient authorized Class A Common Stock for the issuance of Warrant Shares and/or (ii) whether a Fundamental Transaction occurs prior to the Initial Exercise Date. |
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| 3.5. | Calculations. All calculations under this Section 3 shall be made to the nearest fraction of a cent as in the initial Exercise Price or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of Class A Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of Class A Common Stock (excluding treasury shares, if any) issued and outstanding. |
| 3.6. | Notice to Holder. |
| 3.6.1. | 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. |
| 3.6.2. | Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Class A Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Class A Common Stock, (C) the Company shall authorize the granting to all holders of the Class A 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 Class A 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 Class A Common Stock are 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 last 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 Class A 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 Class A Common Stock of record shall be entitled to exchange their Class A 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. |
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| 4. | Transfer of Warrant |
| 4.1. | Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4.4 hereof, 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 as Exhibit 2.4.6 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 after 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. |
| 4.2. | 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 4.1, 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 Issuance Date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto. |
| 4.3. | 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. |
| 4.4. | 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 (x) the transferor (other than in connection with a transfer to an Affiliate of the transferor) provide to the Company an opinion of counsel to the effect that such transfer does not require registration of such transferred Warrant under the Securities Act and (y) that the transferee agree in writing to be bound by the terms of the Purchase Agreement, with all the rights and obligations of an Investor under such agreement. |
| 4.5. | 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. |
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| 5. | Miscellaneous |
| 5.1. | 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 2.4.1, 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 2.3 or to receive cash payments pursuant to Section 2.4.1 and Section 2.4.4 herein, notwithstanding anything herein to the contrary, in no event will the Holder hereof be entitled to receive a net-cash settlement as liquidated damages in lieu of physical settlement in Class A Common Stock, regardless of whether the Class A Common Stock underlying this Warrant are registered pursuant to an effective registration statement; provided, however, that the foregoing will not preclude the Holder from seeking other remedies at law or equity for breaches by the Company of its registration obligations hereunder. |
| 5.2. | 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. |
| 5.3. | 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. |
| 5.4. | Authorized Shares. |
| 5.4.1. | Reservation of Authorized and Unissued Shares. The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Class A Common Stock a sufficient number of Class A Common Stock 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 Class A 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 (which means that no further sums are required to be paid by the holders thereof in connection with the issue thereof) 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). |
| 5.4.2. | Noncircumvention. 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 articles 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. |
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| 5.4.3. | Authorizations, Exemptions and Consents. Before taking any action that 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. |
| 5.5. | Governing Law; Arbitration. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of Nevada, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by this Warrant (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively by arbitration to be administered by Mediation and Civil Arbitration, Inc. d/b/a RapidRuling (www.rapidruling.com) in accordance with its Commercial Arbitration Rules effective at the time a claim is made (the “Rules”), and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. Arbitrators shall be appointed by RapidRuling. The place of arbitration shall be New York, New York, and any hearing shall be held via video or telephone conference. The parties hereto agree that no objection shall be taken to the decision, order or award of the tribunal following any such hearing on the basis that the hearing was held by video or telephone conference. The parties hereto consent to electronic service of process, with service to be made to the email addresses in effect for notices to the parties under Section 5.8 hereof (and, in the case of the Holder, to the email address of such Holder appearing on the Warrant Register). All such service of process may come from the opposing party’s email or from [email protected]. The parties hereto shall list all said email addresses as “safe senders” (or other whitelist) and are responsible to check their “SPAM” and “junk” type incoming messages on a daily basis. In any such arbitration, the arbitrator shall require the breaching party (if any), as finally determined by the arbitrator, to pay the non-breaching party’s costs and expenses (including such non-breaching party’s reasonable attorneys’ fees, arbitration costs, court costs, and other expenses) associated with enforcing this Warrant and collecting any judgment related thereto. Notwithstanding the foregoing, nothing in this paragraph shall limit or restrict the federal district court in which a Holder may bring a claim under the federal securities laws. EACH OF THE COMPANY AND THE HOLDER 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 WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY. |
| 5.6. | 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. |
| 5.7. | 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. No provision of this Warrant shall be construed as a waiver by the Holder of any rights which the Holder may have under the federal securities laws and the rules and regulations of the Commission thereunder. 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. |
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| 5.8. | Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice of Exercise, shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service, addressed to the Company, at 2750 Premiere Parkway, Suite 900, Duluth, Georgia 30097, Attention: Ryan Zeek, Chief Financial Officer, email address: [email protected], with a copy (which shall not constitute notice) to the Company’s counsel, Lucosky Brookman LLP, 111 Broadway, Suite 807, New York, New York 10006, Attention: Joseph Lucosky, email: [email protected], or such other email address or address as the Company may specify for such purposes by notice to the Holders. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service addressed to each Holder at the e-mail address or address of such Holder appearing on the books of the Company. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in this Section 5.8 prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in this Section 5.8 on a Calendar Day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. | |
| 5.9. | 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 Class A Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company. | |
| 5.10. | 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. | |
| 5.11. | 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. | |
| 5.12. | Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on the one hand, and a majority-in-interest of Holders of the Warrants, on the other hand. No modification or amendment of the provisions hereof may be made nor waived in a manner that is more favorable to other holder(s) of Warrants, as applicable, or to treat any holder(s) of Warrants in a manner that is in any respect not equal to the treatment of all other holder(s) of Warrants. | |
| 5.13. | 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. | |
| 5.14. | 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. |
********************
[Boxlight Investor Pre-Funded Warrant Signature Page Follows]
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[Boxlight Investor Pre-Funded Warrant Signature Page]
IN WITNESS WHEREOF, the Company has caused this Pre-Funded Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
| BOXLIGHT CORPORATION | ||
| By: | ||
| Name: | [●] | |
| Its: | [●] | |
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Exhibit 2.1
NOTICE OF EXERCISE
| TO: | BOXLIGHT CORPORATION |
(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.
☐ if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2.3, to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2.3.
(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) The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.
| Name of Investing Entity: | |
| Signature of Authorized Signatory of Investing Entity: | |
| Name of Authorized Signatory: | |
| Title of Authorized Signatory: | |
| Date: |
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Exhibit 2.4.6
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to exercise the Warrant to purchase Class A Common Stock.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
| Name: | |
| Address: | |
| Phone Number: | |
| Email Address: | |
| Date: | |
| Holder’s Signature: | |
| Holder’s Address: |
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Exhibit 10.8
PLACEMENT AGENT AGREEMENT
August 5, 2026
PERSONAL AND CONFIDENTIAL
Ryan Zeek, Chief Financial Officer
Boxlight Corporation
2750 Premiere Parkway, Ste. 900
Duluth, Georgia 30097
| Re: | Boxlight | PIPE Offering | Placement Agent Agreement |
Dear Mr. Zeek:
The purpose of this placement agent agreement (this “Agreement”) is to outline our agreement pursuant to which RBW Capital Partners LLC and Dawson James Securities, Inc., as the placement agent (collectively, the “Placement Agent”) will act as the placement agent on a “best efforts” basis in connection with the proposed PIPE offering (the “Placement”) by Boxlight Corporation (collectively, with its subsidiaries and affiliates, the “Company”) of shares of the Company’s Series D Convertible Preferred Stock (the “Preferred Stock”), which are convertible into shares of the Company’s Class A common stock, par value $0.0001 per share (the “Class A Common Stock”). The shares of Class A Common Stock issuable upon conversion of the Preferred Stock are referred to herein as the “Conversion Shares”, and the Preferred Stock and the Conversion Shares are referred to herein, collectively, as the “Securities”. This Agreement sets forth certain conditions and assumptions upon which the Placement is premised. The Company expressly acknowledges and agrees that Placement Agent’s obligations hereunder are on a reasonable “best efforts” basis only and that the execution of this Agreement does not constitute a commitment by Placement Agent to purchase the Securities and does not ensure the successful placement of the Securities or any portion thereof or the success of Placement Agent with respect to securing any other financing on behalf of the Company. The Company confirms that entry into this Agreement and completion of the Placement with Placement Agent 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. Any capitalized terms not defined herein shall have the meaning set forth in the Securities Purchase Agreement (as defined below).
The terms of our agreement are as follows:
| 1. | Engagement. The Company hereby engages Placement Agent, for the period beginning on the date hereof and ending three (3) months 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, and as long as Placement Agent 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. Placement Agent 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). Placement Agent shall use commercially reasonable efforts to assist the Company in obtaining performance by each Purchaser (as defined in the Securities Purchase Agreement) whose offer to purchase Securities has been solicited by Placement Agent, but Placement Agent 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 Placement Agent be obligated to underwrite or purchase any Securities for its own account and, in soliciting purchases of the Securities, Placement Agent shall act solely as an agent of the Company. The services provided pursuant to this Agreement shall be on an “agency” basis and not on a “principal” basis. |
| 2. | The Placement. Placement Agent will act as placement agent for the Placement subject to, among other matters referred to herein and additional customary conditions, completion of Placement Agent’s due diligence examination of the Company and its affiliates, listing approval by The Nasdaq Stock Market LLC (“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”). |
| 3. | Placement Compensation. The Company shall pay to the Placement Agent (i) a cash fee equal to 7.0% of the aggregate gross proceeds received by the Company in the Placement (excluding any gross proceeds received by the Company under the ELOC); and (ii) a cash fee equal to 2.0% of the aggregate gross proceeds received by the Company under the ELOC as amounts are drawn down thereunder. |
| 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, 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 prospectus included therein (the “Prospectus”) covering the resale of the 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 Placement Agent and counsel to the investors and Placement Agent. Other than any information provided by the investors or Placement Agent in writing specifically for inclusion in the Registration Statement or the Prospectus, the Company will be solely responsible for the contents of the 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 effective date of the Registration Statement, the date of the Prospectus and any amendment or supplement thereto, and. as of the date of the offer or sale of the 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 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 Placement Agent immediately of such event and Placement Agent will suspend further solicitations of prospective purchasers of the 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. | Company Standstill. In connection with the Placement, without the prior written consent of the investors, the Company will not, from the date hereof and for so long as any shares of Preferred Stock remain outstanding (the “Standstill Period”), (a) offer, sell, issue, or otherwise transfer or dispose of, directly or indirectly, any equity of the Company or any securities convertible into or exercisable or exchangeable for equity of the Company; (b) file or caused to be filed any registration statement with the Commission relating to the offering of any equity of the Company or any securities convertible into or exercisable or exchangeable for equity of the Company; or (c) enter into any agreement or announce the intention to effect any of the actions described in subsections (a) or (b) hereof (all of such matters, the “Standstill Restrictions”). Notwithstanding the foregoing, the following matters shall not be prohibited by the Standstill Restrictions: (i) the adoption of an equity incentive plan and the grant of awards or equity pursuant to any equity incentive plan, and the filing of a registration statement on Form S-8; (ii) securities issued pursuant to agreements, options, restricted share units or convertible securities existing as of the date hereof provided the terms are not modified; and (iii) securities issued pursuant to acquisitions or strategic transactions (whether by merger, consolidation, purchase of equity, purchase of assets, reorganization or otherwise) approved by a majority of the disinterested directors of the Company, provided that such securities in this clause (iii) 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 during the Standstill Period, and provided that any such issuance shall only be to a person or entity (or to the equityholders of an entity) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic 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; (iv) any issuance of Class A Common Stock pursuant to the ELOC; and (v) securities issued upon the exercise, exchange or conversion of any Securities issued in the Placement. |
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| 6. | Expenses. Whether or not the Placement is consummated, the Company shall reimburse the Placement Agent promptly upon request for all reasonable and accountable out-of-pocket expenses incurred in connection with the Placement, including, without limitation, road show and travel expenses, due diligence expenses, the costs of background checks on the Company’s officers and directors and any of its shareholders designated by the Placement Agent, the costs associated with the Placement Agent’s use of book-building and compliance software, the fees and expenses of the Placement Agent’s legal counsel and any other independent advisors retained by the Placement Agent, and all fees, expenses and disbursements required under the “blue sky” securities laws of such states and other jurisdictions as the Placement Agent may reasonably designate (with the Company’s consent, which shall not be unreasonably withheld); provided that the aggregate out-of-pocket expenses reimbursable under this Section shall not exceed $100,000. |
| 7. | Tail Financing. Placement Agent 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 Placement Agent has introduced to and/or contacted on behalf of the Company through an in-person, electronic or telephonic communication or investors that Placement Agent 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 Agreement. |
| 8. | Closing; Closing Deliverables. |
8.1. Company Deliveries.
8.1.1. On the date hereof, the Company shall deliver each of the following:
8.1.1.1 This Agreement duly executed by the Company.
8.1.1.2 A certificate executed by the Chief Financial Officer of the Company in customary form reasonably satisfactory to the Placement Agent.
8.1.1.3 The Registration Rights Agreement duly executed by the Company.
8.1.1.4 The Lock-Up Agreements.
8.1.1.5 The Escrow Agreement duly executed by the Company.
8.1.2. On or prior to the Closing Date, the Company shall deliver each the following:
8.1.2.1 A legal opinion of Lucosky Brookman LLP (Company Counsel), addressed to the Placement Agent and the Purchasers, in form and substance reasonably acceptable to the Placement Agent and Purchasers.
8.1.2.2 A copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to reserve the number of Class A Common Stock required to be reserved under the Securities Purchase Agreement.
8.1.2.3 The Company shall have provided Placement Agent the signed flow of funds executed by the Chief Executive Officer of the Company or Chief Financial Officer of the Company.
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8.1.2.4 A duly executed and delivered Officers’ Certificate, in customary form reasonably satisfactory to the Placement Agent.
8.1.2.5 Duly executed joint written instructions to the Escrow Agent.
8.1.2.6 The ELOC, duly executed by the Company.
8.1.2.7 Issuance to [ ] of the shares of Class A Common Stock issuable as the Commitment Shares (as defined in the ELOC) due upon execution.
8.1.2.8 To each Purchaser, the shares of Preferred Stock having an aggregate Stated Value equal to such Purchaser’s Subscription Amount multiplied by 1.25, registered in the name of such Purchaser.
8.1.2.9 The Transfer Agent Instruction Letter duly executed by the Company and the Transfer Agent.
| 9. | 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 (on which the Company authorizes the Placement Agent to rely), in each case as of the date hereof and as of the Closing Date as though then made, to the timely performance by the Company of its covenants and other obligations hereunder on and as of such dates, and to each of the following additional conditions: |
9.1. Listing of Additional Shares. On or before the Closing Date, the Company shall have filed a notice with the Exchange with respect to the Company’s additional listing of the Class A Common Stock underlying the Securities.
9.2. 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.
9.3. The No Material Changes. Prior to and on the Closing Date: (i) there shall have been no Material Adverse Effect (as defined in the Securities Purchase Agreement) or development involving a prospective Material Adverse Effect (as defined in the Securities Purchase Agreement) in the condition or prospects or the business activities, financial or otherwise, of the Company; (ii) no action, suit or proceeding, at law or in equity, shall have been pending or threatened in writing against the Company before or by any court or federal or state commission, board or other administrative agency wherein an unfavorable decision, ruling or finding would reasonably be expected to materially adversely affect the business, operations, prospects or financial condition or income of the Company, except as set forth in the SEC Reports (as defined in the Securities Purchase Agreement); and (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.
9.4. 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.
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| 10. | Prior Agreement. By entering into this Agreement, the parties agree that that certain letter agreement, dated July 7, 2026, entered into between the same parties hereof, shall terminate and be superseded by this Agreement solely with respect to the Placement, and shall not otherwise be terminated but shall remain in full force and effect in accordance with its terms. |
| 11. | Termination. Notwithstanding anything to the contrary contained herein, the Company agrees that the provisions relating to the payment of fees (Section 3), reimbursement of expenses (Section 6), tail fee (Section 7), right of first refusal (Section 8), indemnification and contribution (Section 16), equitable remedies (Section 17), confidentiality (Section 14), conflicts (Section 15) and governing law and venue (Section 18) will survive any termination or expiration of this Agreement. Notwithstanding anything to the contrary contained herein, the Company has the right to terminate this 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 and right of first refusal. Notwithstanding anything to the contrary contained in this 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 Placement Agent 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 Period: (i) the Company will not, and will not permit its representatives to, other than in coordination with Placement Agent, 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 the Engagement Period, all inquiries from prospective investors will be referred to Placement Agent. Regardless of termination and except as stated in this Section 12, Section 7 of this Agreement will still remain in full effect if an offering is consummated. |
| 12. | Publicity. The Company agrees that it will not issue press releases or engage in any other publicity, without Placement Agent’s prior written consent, commencing on the date hereof and continuing until the end of the Engagement Period. |
| 13. | Information. During the Engagement Period, the Company agrees to cooperate with Placement Agent and to furnish, or cause to be furnished, to Placement Agent, any and all information and data concerning the Company, and the Placement that Placement Agent deems appropriate (the “Information”). The Company will provide Placement Agent reasonable access during normal business hours from and after the date of execution of this Agreement until the end of the Engagement Period 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, Placement Agent will keep strictly confidential all non-public Information concerning the Company provided to Placement Agent. 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 Placement Agent, (b) was known or became known by Placement Agent prior to the Company’s disclosure thereof to Placement Agent as demonstrated by the existence of its written records, (c) becomes known to Placement Agent 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 Placement Agent 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. |
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| 14. | No Third Party Beneficiaries; No Fiduciary Obligations. This 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) Placement Agent 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 Agreement or the retention of Placement Agent hereunder, all of which are hereby expressly waived; and (ii) Placement Agent 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, Placement Agent 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 Agreement. During the course of Placement Agent’s engagement with the Company, Placement Agent 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. |
| 15. | Indemnification, Advancement & Contribution. |
15.1. Indemnification. In connection with the Company’s engagement of Placement Agent hereunder, the Company hereby agrees to indemnify and hold harmless Placement Agent and its affiliates, and the respective controlling persons, directors, officers, members, shareholders, agents and employees of any of the foregoing (collectively the “Indemnified Persons”), from and against any and all claims, actions, suits, proceedings (including those of shareholders), damages, liabilities and expenses incurred by any of them (including the reasonable fees and expenses of counsel), as incurred, whether or not the Company is a party thereto (collectively a “Claim”), that are (A) related to or arise out of (i) any actions taken or omitted to be taken (including any untrue statements made or any statements omitted to be made) by the Company, or (ii) any actions taken or omitted to be taken by any Indemnified Person in connection with the Company’s engagement of Placement Agent, or (B) otherwise relate to or arise out of Placement Agents’ activities on the Company’s behalf under Placement Agents’ engagement, and the Company shall reimburse any Indemnified Person for all expenses (including the reasonable fees and expenses of counsel) as incurred by such Indemnified Person in connection with investigating, preparing or defending any such claim, action, suit or proceeding, whether or not in connection with pending or threatened litigation in which any Indemnified Person is a party. The Company will not, however, be responsible for any Claim that is finally judicially determined to have resulted from the gross negligence or willful misconduct of any such Indemnified Person for such Claim. The Company further agrees that no Indemnified Person shall have any liability to the Company for or in connection with the Company’s engagement of Placement Agent except for any Claim incurred by the Company as a result of such Indemnified Person’s gross negligence or willful misconduct.
The Company further agrees that it will not, without the prior written consent of Placement Agent, settle, compromise or consent to the entry of any judgment in any pending or threatened Claim in respect of which indemnification may be sought hereunder (whether or not any Indemnified Person is an actual or potential party to such Claim), unless such settlement, compromise or consent includes an unconditional, irrevocable release of each Indemnified Person from any and all liability arising out of such Claim.
Promptly upon receipt by an Indemnified Person of notice of any complaint or the assertion or institution of any Claim with respect to which indemnification is being sought hereunder, such Indemnified Person shall notify the Company in writing of such complaint or of such assertion or institution but failure to so notify the Company shall not relieve the Company from any obligation it may have hereunder, except and only to the extent such failure results in the forfeiture by the Company of substantial rights and defenses. If the Company is requested by such Indemnified Person, the Company will assume the defense of such Claim, including the employment of counsel for such Indemnified Person and the payment of the fees and expenses of such counsel, provided, however, that such counsel shall be satisfactory to the Indemnified Person and provided further that if the legal counsel to such Indemnified Person reasonably determines that the use of counsel chosen by the Company to represent such Indemnified Person would present such counsel with a conflict of interest or if the defendant in, or target of, any such Claim, includes an Indemnified Person and the Company, and legal counsel to such Indemnified Person reasonably concludes that there may be legal defenses available to it or other Indemnified Persons different from or in addition to those available to the Company, such Indemnified Person will employ its own separate counsel (including local counsel, if necessary) to represent or defend him, her or it in any such Claim and the Company shall pay the reasonable fees and expenses of such counsel. If such Indemnified Person does not request that the Company assume the defense of such Claim, such Indemnified Person will employ its own separate counsel (including local counsel, if necessary) to represent or defend him, her or it in any such Claim and the Company shall pay the reasonable fees and expenses of such counsel. Notwithstanding anything herein to the contrary, if the Company fails timely or diligently to defend, contest, or otherwise protect against any Claim, the relevant Indemnified Person shall have the right, but not the obligation, to defend, contest, compromise, settle, assert crossclaims, or counterclaims or otherwise protect against the same, and shall be fully indemnified by the Company therefor, including without limitation, for the reasonable fees and expenses of its counsel and all amounts paid as a result of such Claim or the compromise or settlement thereof. In addition, with respect to any Claim in which the Company assumes the defense, the Indemnified Person shall have the right to participate in such Claim and to retain his, her or its own counsel therefor at his, her or its own expense.
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The Company agrees that if any indemnity sought by an Indemnified Person hereunder is held by a court to be unavailable for any reason then (whether or not Placement Agent is the Indemnified Person), the Company and Placement Agent shall contribute to the Claim for which such indemnity is held unavailable in such proportion as is appropriate to reflect the relative benefits to the Company, on the one hand, and Placement Agent on the other, in connection with Placement Agents’ engagement referred to above, subject to the limitation that in no event shall the amount of Placement Agents’ contribution to such Claim exceed the amount of fees actually received by Placement Agent from the Company pursuant to Placement Agents’ engagement. The Company hereby agrees that the relative benefits to the Company, on the one hand, and Placement Agent on the other, with respect to Placement Agents’ engagement shall be deemed to be in the same proportion as (a) the total value paid or proposed to be paid or received by the Company pursuant to the Offering (whether or not consummated) for which Placement Agent is engaged to render services bears to (b) the fee paid or proposed to be paid to Placement Agent in connection with such engagement.
The Company’s indemnity, reimbursement and contribution obligations under this Agreement (a) shall be in addition to, and shall in no way limit or otherwise adversely affect any rights that any Indemnified Person may have at law or at equity, and (b) shall be effective whether or not the Company is at fault in any way.
| 16. | Equitable Remedies. Each party to this 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 Placement Agent 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, Placement Agent 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 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. |
| 17. | Governing Law; Venue; Arbitration. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Florida, without regard to principles of conflicts of law. With respect to any controversy or claim relating to, arising under or involving this Agreement or the breach thereof (a “Claim”), the matter shall first be submitted for mediation through the Judicial Arbitration and Mediation Service, Inc. (“JAMS”) and its applicable rules in Boca Raton, Florida. In the event the parties are unable to resolve any Claim after mediation, the Claim shall be submitted to JAMS for final and binding arbitration pursuant to its Comprehensive Arbitration Rules and Procedures in Boca Raton, Florida, before a neutral arbitrator who shall be an attorney or retired judge, whose award shall be final and binding on the parties. Except to the extent otherwise required pursuant to the applicable JAMS rules and applicable law, each party shall pay the fees of its respective attorneys, experts and other costs. Notwithstanding the foregoing, in the case of any actual or threatened breach of the standstill, exclusivity or other covenants of this Agreement, Placement Agent may seek and obtain an injunction or other equitable relief from any court of competent jurisdiction, and nothing in this Agreement shall limit such right. Any rights to trial by jury with respect to any such action, proceeding or suit are hereby waived by Placement Agent and the Company. Each party hereby irrevocably agrees and consents to be subject to the jurisdiction of the state and federal courts located in Palm Beach County, State of Florida, in any suit, action or proceeding pursuant to this Agreement. |
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| 18. | Notices. All notices hereunder will be in writing and sent by certified mail, hand delivery, overnight delivery and e-mail at the address set forth below. Notices sent by certified mail shall be deemed received five days thereafter, notices sent by hand delivery or overnight delivery shall be deemed received on the date of the relevant written record of receipt, notices sent by e-mail shall be deemed received as of the date and time they were sent. |
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If to Boxlight Corporation
Ryan Zeek, Chief Financial Officer Boxlight Corporation 2750 Premiere Parkway, Ste. 900 Duluth, Georgia 30097 |
With a copy to (which shall not constitute notice)
Company Counsel:
Joseph Lucosky Lucosky Brookman 111 Broadway, Suite 807 New York, New York 10006
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If to RBW Capital Partners LLC
Joe Giamichael, Managing Partner RBW Capital Partners LLC 1511 Ponce De Leon, Unit 1092 San Juan, PR 00909
If to Dawson James Securities, Inc. Robert D. Keyser, Jr., Chief Executive Officer Dawson James Securities, Inc. 2700 N. Military Trail, Suite 100 Boca Raton, FL 33431
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With a copy to (which shall not constitute notice)
Placement Agent Counsel:
Anthony Basch Partner Kaufman & Canoles, P.C. Two James Center 1021 East Cary Street, Suite 1400 Richmond, Virginia 23219 [email protected] |
| 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 Agreement and the execution, delivery and performance of this Agreement does not breach or conflict with any agreement, document or instrument to which it is a party or bound. The binding provisions of this Agreement are legally binding upon and inure to the benefit of both the Company and Placement Agent and their respective assigns, successors, and legal representatives. If any provision of this 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 this Agreement shall remain in full force and effect. This 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 Agreement in electronic form and understands and agrees that this Agreement may be signed electronically. Signatures to this 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 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 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 Agreement. This 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 Boxlight PIPE Offering Placement Agent Agreement Follows]
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Very truly yours,
| RBW CAPITAL PARTNERS LLC | ||
| By: | ||
| Name: | Joe Giamichael | |
| Title: | Managing Partner | |
| DAWSON JAMES SECURITIES, INC. | ||
| By: | ||
| Name: | Robert D. Keyser, Jr. | |
| Title: | Chief Executive Officer | |
AGREED AND ACCEPTED:
The foregoing accurately sets forth our understanding and agreement with respect to the matters set forth herein.
Boxlight Corporation
| By: | ||
| Name: | Ryan Zeek | |
| Title: | Chief Financial Officer |
[Signature Page of GCDT PIPE Offering Placement Agent Agreement]