SRFM 8-K
Surf Air Mobility Inc. (SRFM)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 1.01. Entry into a Material Definitive Agreement
On November 10, 2025, Surf Air Mobility, Inc. (the “Company”) entered into securities purchase agreements (the “Purchase Agreements”) with certain institutional investors relating to the offering and sale of:
The offerings described above closed on November 12, 2025 (the “Closing Date”).
In addition, the Company issued 1,000,000 shares of Common Stock (the “Palantir Shares”) on November 10, 2025 at a price of $3.32 per share as a prepayment of consideration for license fees and related professional services to be rendered by Palantir Technologies Inc. (“Palantir”) pursuant to the Company’s existing software license agreement with Palantir (the “Palantir Placement”). In addition, the Company delivered 881,579 additional shares of common stock to Palantir as consideration for license fees and related professional services pursuant to the License Agreement on an unregistered basis on November 12, 2025, representing a total payment in shares (together with the Palantir Placement) of approximately $6,000,000.
The Company received gross proceeds from the offerings of approximately $85 million before deducting estimated offering expenses. The Company intends to use the net proceeds from the Registered Direct Offering and the offering of the Private Placement Shares and the Private Placement Warrants for the funding of separately capitalized subsidiaries. The Company intends to use the net proceeds from the offering of the Note (together, the “Concurrent Offerings”) to repay outstanding indebtedness under (i) its 4-year credit agreement with certain affiliates of Comvest Partners, as lenders, dated November 14, 2024, (ii) its convertible note issued under its June 21, 2023, convertible note purchase agreement with Partners for Growth V.L.P. (the “PfG Convertible”) and (iii) its mandatory convertible security (the “GEM Mandatory”) issued under its mandatory convertible security purchase agreement with GEM Global Yield LLC SCS, dated March 1, 2024. Prepayment of the PfG Convertible will occur through an initial payment of $4 million shortly after closing of the offerings and monthly principal payments of no less than $500,000 thereafter. The Company will not receive any cash proceeds from the Palantir Placement. The Company estimates that offering expenses payable by the Company in the offerings will be approximately $6.2 million.
Without giving effect to the issuance of the shares described above, the exercise of any portion of the Warrants or the conversion of any portion of the Note, as of November 7, 2025, the Company had 52,266,051 shares of Common Stock outstanding.
The Registered Shares, Registered Warrants and Palantir Shares are being offered and sold to the public pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-284845) initially filed with the Securities and Exchange Commission (the “Commission”) on March 21, 2025 and declared effective on March 26, 2025, and the related short-form registration statement filed with the Commission on November 10, 2025 pursuant to Rule 462(b) of the Securities Act of 1933, as amended (the “Securities Act”). In connection with the Registered Direct Offering and the Palantir Placement, a preliminary prospectus supplement (“the Preliminary Prospectus Supplement”) and final prospectus supplement dated November 10, 2025, including the accompanying base prospectus dated March 26, 2025, was filed with the Commission on November 10, 2025 and November 12, 2025, respectively (the “Prospectus Supplement”) and are available on the Commission’s web site at http://www.sec.gov.
The Private Placement Shares, the Private Placement Warrants, the Note, and the shares of Common Stock issuable upon exercise of the Private Placement Warrants or the conversion of the Note are being offered and sold in reliance on the private placement exemption from registration provided by Section 4(a)(2) of the Securities Act.
The Warrants
The exercise price of each Registered Warrant is $3.32 per share. The Registered Warrants are exercisable immediately and expire on the second anniversary of the original issuance date. The Registered Warrants are initially exercisable solely on a cashless basis, but will become exercisable against payment of the exercise price if the Company subsequently files, and causes to become effective, a registration statement registering such exercise and notifies the holders.
Subject to specified conditions, the Company may force the holder to exercise the Registered Warrants at any time if the last reported sale price per share of Common Stock equals or exceeds 150% of the exercise price on each of the immediately preceding 20 consecutive trading days beginning after the original issuance date of the Registered Warrants and ending on the date upon which the forced exercise notice is delivered to the holder.
The Private Placement Warrants have terms substantially identical to the Registered Warrants (other than as regards transfer restrictions related to the private placement and that the private placement warrants will be exercisable for cash from the time of issuance). We are required to use commercially reasonable efforts to file a registration statement registering the resale of the shares of common stock issuable upon exercise of the Private Placement Warrants within 100 days following the Closing Date and to use commercially reasonable efforts to cause the applicable registration statement to become effective within 130 days following the Closing Date.
The Note
The Note will be the senior secured obligation of the Company, guaranteed by certain of the Company’s subsidiaries. The Note is being sold at 87.8% of its principal amount the Company will receive $65 million of proceeds before expenses for the Note. The Note will not accrue interest except in the event of an event of default. The Note will accrue interest at a rate of 15% per annum upon any event of default. The Note will mature on October 31, 2028, unless earlier converted, redeemed or repurchased. Repayment of any principal amount remaining outstanding at maturity will be required to be made at 105% of such principal amount.
The Note may be converted at an initial conversion rate of 251.0040 shares of Common Stock per $1,000 principal amount of Note (equivalent to an initial conversion price of approximately $3.98 per share of Common Stock), representing an aggregate of 18,574,297 shares of Common Stock. The conversion rate is subject to adjustment if certain events occur.
Subject to specified conditions, the Company may force the holder to convert the Note at any time if the last reported sale price per share of Common Stock equals or exceeds 150% of the then current conversion price on each of the immediately preceding 20 consecutive trading days, in amounts (i) not less than the lesser of (x) $10,000,000 and (y) the remaining outstanding principal amount of the Note, but (ii) not greater than 2.5 times the average dollar daily trading volume during the related 20 trading day measurement period.
The Note will be redeemable, in whole or in part, for cash at the Company’s option at any time upon 20 trading days’ notice in a minimum principal amount of $10 million (or, if less, the remaining principal amount of the Note), which, solely if the conversion value of the Notes is greater than their principal amount, shall also not be greater than 2.5 times the average daily dollar trading volume during the related measurement period. The redemption price will be equal to the principal amount of the Note to be redeemed, plus accrued and unpaid interest thereon (the “Company Redemption Price”). In order to exercise the Company’s option to redeem, the equity conditions specified in the Note must be satisfied, including, but not limited to the following: there is no pending, proposed or intended fundamental change (as described below), and no event of default will have occurred.
The holder will have the option to require the Company to partially redeem the Note on the first and fifteenth day of each month beginning March 1, 2026 in an amount equal to the greater of (a) 5.0% of the aggregate dollar trading volume of the Common Stock, (b) an amount equal to (i) $2,000,000, minus (ii) the cumulative sum of the amounts by which the principal amounts partially redeemed have exceeded $2,000,000 for all prior redemption periods, less any amounts that have previously been applied by the Company pursuant to this clause (ii) to reduce partial redemption amounts, if any, and (c) $750,000. The holder may elect to receive shares in an amount determined by applying the conversion rate to the redemption payment otherwise due. Any such partial redemption payment (whether in cash or in shares) shall reduce the principal amount by such paid amount divided by one hundred five percent (105%). The maximum number of shares issuable under the Note (if the entire Note were redeemed on this basis) would be 19,503,012.
Additionally, a portion of the Note equal to 5.0% of the aggregate trading volume of the Common Stock multiplied by the volume weighted average price for each day during which the Note is “in the money” (have a conversion value higher than their principal amount) during the time between issuance and the effectiveness of a related resale registration statement will be redeemed for a price equal to the underlying conversion value of the principal amount so redeemed (the “Special Redemption Price”).
Further, on March 1, 2026, the holder of the Note will have the right to require us to redeem a principal amount of the Note equal to up to 50% of the gross proceeds from any equity financings (including from our equity line of credit or any future at-the-market (ATM) program) since issuance off the Note, provided that in no event will such amount exceed (a) $6,000,000 minus (b) the sum of 50% of any Special Redemption Price paid and 50% of the principal amount of the Note converted since issuance, in each case prior to March 1, 2026.
In the event of a fundamental change, as described in the Note and generally including (i) any person or group becoming the beneficial owner of more than 50% of the voting power represented by the outstanding Common Stock, (ii) the sale, transfer or
other disposition of all or substantially all of the Company’s properties or assets and (iii) any transaction or series of related transactions in connection with which (whether by means of merger, consolidation, share exchange, combination, reclassification, recapitalization, acquisition, liquidation or otherwise) all of the Common Stock is exchanged for, converted into, acquired for, or constitutes solely the right to receive, other securities, cash or other property, the holder of the Note will have the right to require the Company to repurchase the Note (or a portion thereof) for a cash purchase price equal to the greater of (A) 100% of the principal amount of the Note being repurchased, plus any accrued and unpaid interest thereon and (B) the sum of (I) 110% of the product of (a) the conversion rate then in effect, (b) the principal amount of the Note being repurchased, (c) the highest daily volume weighted average price per share of common stock occurring during the period commencing five (5) trading days prior to the earlier of (x) the effective date of such fundamental change and (y) the date that such fundamental change is publicly announced and ending on the date immediately preceding the fundamental change repurchase date and (II) the accrued and unpaid interest thereon
Immediately following the closing of the Note transaction, we are required to register the resale of the shares of Common Stock issuable upon conversion of the Note and use reasonable best efforts to cause the applicable registration statement to become effective within 21 days following the closing date. In the event such registration statement ceases to remain continuously effective, the Company is required to pay (i) on the first business day after such event an amount in cash, as partial liquidated damages, equal to the product of 2.0% multiplied by the aggregate principal amount of the Note then outstanding, and (ii) additional liquidated damages, which will automatically accrue on the principal amount of the Note then outstanding, at a rate per annum equal to 24.0%, from, and including, the date of the applicable event, to, but excluding the date that a registration statement is available for the resale of the shares of Common Stock issuable upon conversion of the Note and all outstanding liquidated damages have been paid; provided, however, that liquidated damages with respect to any suspension or termination of a resale registration statement following initial effectiveness shall be payable only through the fifth business day after the liquidated damages begin to accrue.
If certain events of default occur, the holder of the Note may declare the Note due and payable for cash in an amount equal to the greater of (A) the sum of (1) any amount paid pursuant to the Letter of Credit (as defined below), (2) 115% of 105% of the then outstanding principal amount of the Note, after deducting from such principal amount any payment pursuant to the Letter of Credit and (3) accrued and unpaid interest and (B) the sum of (1) 110% of the conversion value of the then outstanding principal amount of the Note and (2) accrued and unpaid interest (the “Event of Default Acceleration Amount”). In the event the conversion value of the Note is equal to or less than their principal amount, the Company may instead redeem the Note in whole or in part or Park Lane Investments LLC (“Park Lane”), the credit support provider, may purchase the Note in whole, but not in part, in either case for a cash price equal to the Event of Default Acceleration Amount, and the principal amount not redeemed or purchased shall become due and payable for cash in an amount equal to the Event of Default Acceleration Amount. Upon such acceleration, the holder may draw upon the Letter of Credit (solely to the extent not redeemed or repurchased by the Company or Park Lane) and exercise any and all rights and remedies provided to the holder under the Note or any related security document, including all rights and remedies available under the UCC. If an event of default occurs and the Note is not redeemed, default interest will accrue on the principal amount of the Note then outstanding at a rate per annum equal to 15% from, and including, the date of such event of default to, but excluding, the date such event of default is cured.
The Company’s obligations under the Note will be guaranteed by substantially all of the Company’s subsidiaries, and will be subject to a security interest on the assets of the Company and the subsidiary guarantors, subject to certain exceptions.
The Company is subject to comprehensive negative and affirmative covenants, including, inter alia, restrictions on its ability to incur indebtedness, create liens, make investments, declare or pay cash dividends or repurchase equity, and transfer or sell material assets, in each case subject to certain enumerated exceptions. The Company must also maintain a minimum liquidity of $10,000,000 in unrestricted cash and cash equivalents in controlled accounts. The Company also must obtain prior written consent from a majority of holders of the Note before issuing additional Note or securities that would cause a default under the Note or restrict the Company’s ability to pay the principal amount thereon. In addition, the Company must maintain a required reserve of authorized and unissued common stock calculated pursuant to a specified formula set forth in the Note, and deliver and maintain the Letter of Credit to backstop the Note. The Company must also maintain at least $30,000,000 in available capacity under either an equity line of credit or an “at-the-market” offering within the meaning of Rule 415(a)(4) of the Securities Act pursuant to which the Company may issue and sell shares of common stock from time to time. Additional affirmative covenants require the Company to maintain its business within existing lines, preserve its corporate existence, properties and intellectual property rights, maintain adequate insurance and ensure affiliate transactions are on arm’s length terms.
Letter of Credit and Reimbursement Agreement Amendment
In connection with the offering of the Note and the refinancing of existing liabilities of the Company, the Company is required to cause the issuance and delivery of an irrevocable standby letter of credit in an amount equal to $30,000,000 to backstop the Note (the “Letter of Credit”). The Note contains certain representations and warranties, covenants and events of default. Upon the occurrence of certain events of default, the holders of the Note would have the right to draw upon the letter of credit.
On November 12, 2025, the Company also entered into an amendment to the Company’s existing reimbursement agreement, dated as of such date (as amended, the “Reimbursement Agreement”), among the Company, the subsidiaries of the Company party thereto and Park Lane, to add the Letter of Credit to the scope of the Reimbursement Agreement. If the Letter of Credit is drawn upon, the Company will be required to reimburse Park Lane for the drawn amount of the letter of credit and pay interest to Park Lane at 15.00% per annum on such drawn amounts (subject to increase in the event of default). The Company is separately obligated to pay a fee of 1.00% per annum to Park Lane on the outstanding principal amount of the backstop letter of credit. In the event the Company raises capital in certain equity offerings, a portion of the net cash proceeds from such equity offerings is required to be remitted to Park Lane to be held in trust in accordance with the Reimbursement Agreement. The obligations under the Reimbursement Agreement are guaranteed by certain of the Company’s subsidiaries, and subject to a security interest on assets of the Company and the subsidiary guarantors, subject to certain exceptions. The Reimbursement Agreement contains certain representations and warranties, covenants and events of default. As consideration for Park Lane’s commitment to provide credit support for the Letter of Credit over a three year period, the Company has issued 2,025,000 shares of the Company’s common stock to Park Lane (the “Park Lane Shares”).
The foregoing descriptions of the Purchase Agreements, the Warrants, the Note and the Reimbursement Agreement are qualified in their entirety by reference to the full text of the forms of Securities Purchase Agreement, Warrants, Note and Reimbursement Agreement, copies of which are filed as Exhibits 10.1, 10.2, 10.3 and 10.4 respectively, to this Current Report on Form 8-K and are incorporated by reference herein.
The Company notes that the representations, warranties and covenants made by the Company in any agreement that is filed as an exhibit to any document that is incorporated by reference in the Preliminary Prospectus Supplement, the Prospectus Supplement or the accompanying base prospectus contained therein were made solely for the benefit of the parties to such agreement, including, in some cases, for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation, warranty or covenant to or in favor of any stockholder or potential stockholder of the Company other than the parties thereto. In addition, the assertions embodied in any representations, warranties and covenants contained in such agreements may be subject to qualifications with respect to knowledge and materiality different from those applicable to security holders generally. Moreover, such representations, warranties or covenants were accurate only as of the date when made, except where expressly stated otherwise. Accordingly, such representations, warranties and covenants should not be relied on as accurately representing the current state of the Company’s affairs at any time.
An opinion of Cleary, Gottlieb, Steen & Hamilton LLP regarding the validity of the Registered Shares, the Registered Warrants, the shares of Common Stock issuable upon the exercise of the Registered Warrants, and the Palantir Shares is filed as Exhibit 5.1.
This Current Report on Form 8-K does not constitute an offer to sell or the solicitation of an offer to buy, and these securities cannot be sold in any state or jurisdiction in which this offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any state or jurisdiction. Any offer will be made only by means of a prospectus, including the Preliminary Prospectus Supplement and the Prospectus Supplement, forming a part of the effective registration statement.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information disclosed in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 3.02. Unregistered Sales of Equity Securities.
The information disclosed in Item 1.01 of this Current Report on Form 8-K regarding the Purchase Agreements, the Private Placement Shares, the Private Placement Warrants, the Note, the shares of Common Stock issuable upon exercise of the Private Placement Warrants or the conversion of the Note and the Park Lane Shares is incorporated herein by reference. The Private Placement Shares, the Private Placement Warrants, the Note, the shares of Common Stock issuable upon exercise of the Private Placement Warrants or the conversion of the Note and the Park Lane Shares have not been registered under the Securities Act, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The Company is relying on the private placement exemption from registration provided by Section 4(a)(2) of the Securities Act for the offer and sale of such securities.
Item 7.01. Regulation FD Disclosure.
On November 10, 2025, the Company issued a press release announcing the offerings described in Item 1.01, a copy of which is furnished hereto as Exhibit 99.1 and is incorporated herein by reference.
The information set forth in this Item 7.01 and Exhibit 99.1 is being furnished to and not filed with the Securities and Exchange Commission and shall not be deemed as incorporated by reference in any filing under the Securities Exchange Act of 1934, as amended, or the Securities Act, except to the extent specifically provided in any such filing.
Item 8.01. Other Events.
Essential Air Service Program and Federal Funding Developments
The Company has multi-year contracts with the United States Department of Transportation’s (“DOT”) to operate Essential Air Service (“EAS”) routes, which helps small communities in the United States maintain a minimum level of scheduled air services. During October 2025, the DOT issued public notices regarding a potential lapse in appropriated funding for the EAS program as a result of the federal government shutdown, followed by amended notices extending temporary funding authority through November 18, 2025.
There can be no assurance that funding will continue without interruption after November 18, 2025 or that appropriations will be made on a timely basis. While the DOT has historically restored and funded EAS obligations retroactively following prior government shutdowns, no commitment to do so has been made in connection with this shutdown and there can be no assurance that Congress will authorize retroactive reimbursement for service provided during a lapse. The Company and its operating subsidiaries have provided, and intend to continue to provide, full scheduled EAS service during the current funding uncertainty. The Company will continue to evaluate operations in coordination with the DOT as circumstances evolve.
Interruptions, reductions, or delays in federal appropriations for the EAS program—or changes in related legislation, regulations, or administrative practices—could affect the timing and amount of subsidy payments and increase the Company’s working capital requirements to the extent it elects to continue operating EAS routes during a funding lapse. The Company monitors these developments closely and will continue to assess their potential impact on liquidity, operating results, and overall business strategy.
Outstanding Indebtedness
On November 7, 2025, the Company had consolidated indebtedness of $96.9 million; after giving pro forma effect to the Registered Direct Offering and the private placements described in Item 1.01, including application of the proceeds as described herein, as if they had occurred on that date, the Company would have had consolidated indebtedness of $119.1 million. This reflects, inter alia, reductions in (i) the outstanding principal amount of the secured convertible promissory note (the “LamVen Note”) that the Company issued to LamVen LLC (“LamVen”) in 2024 to refinance certain existing notes and (ii) the GEM Mandatory. The original aggregate principal amount of the LamVen Note was $50.0 million. $35 million principal amount of the LamVen Note has since been converted. On November 7, 2025, LamVen transferred $14.9 million of the remaining $15.0 million outstanding principal amount of the LamVen Note and currently holds the remaining $100,000 aggregate principal amount. The aggregate principal amount outstanding of the GEM Mandatory has been reduced from $38.6 million on December 31, 2024 to $8.3 million as of November 7, 2025.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number |
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Exhibit Title or Description |
5.1 |
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10.1 |
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10.2 |
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10.3 |
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10.4 |
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10.5 |
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23.1 |
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Consent of Cleary, Gottlieb, Steen & Hamilton LLP (contained in Exhibit 5.1) |
99.1 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL) |
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.
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SURF AIR MOBILITY INC. |
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Date: November 12, 2025 |
By: |
/s/ Deanna White |
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Name: |
Deanna White |
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Title: |
Chief Executive Officer |
Exhibit 5.1
November 12, 2025
Surf Air Mobility Inc.
12111 S. Crenshaw Blvd.
Hawthorne, CA 90250
Ladies and Gentlemen:
We have acted as counsel to Surf Air Mobility Inc., a Delaware corporation (the “Company”), in connection with the Company’s offering pursuant to (a) a registration statement on Form S-3 (No. 333-284845) (the “Original Registration Statement”) and (b) a registration statement on Form S-3 (No. 333-291407) filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the “Securities Act”), of 3,975,901 shares (the “Shares”) of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), and of 3,975,901 warrants to purchase 3,975,901 shares of the Common Stock (the “Warrants” and the shares of Common Stock issuable upon exercise of the Warrants, the “Warrant Shares”), each pursuant to the terms of the securities purchase agreements dated November 10, 2025 (the “Purchase Agreements”) between the Company and the buyers listed in the Schedule of Buyers thereto, and of 1,000,000 shares of Common Stock (the “Palantir Shares”) as consideration for license fees and related professional services rendered by Palantir Technologies Inc. Such registration statements, taken together, as amended as of their most recent effective date (November 10, 2025), insofar as they relate to the Shares, Warrants, Warrant Shares and Palantir Shares (as determined for purposes of Rule 430B(f)(2) and Rule 462(b) under the Securities Act), including the documents incorporated by reference therein, are herein called the “Registration Statement;” the related prospectus dated March 26, 2025, included in the Original Registration Statement filed with the Securities and Exchange Commission (the “Commission”) under the Securities Act, including the documents incorporated by reference therein, is herein called the “Base Prospectus;” and the related prospectus supplement dated November 10, 2025, as filed with the Commission pursuant to Rule 424(b) under the Securities Act, including the documents incorporated by reference therein, is herein called the “Final Prospectus Supplement.” The Base Prospectus and the Final Prospectus Supplement together are herein called the “Final Prospectus.”
In arriving at the opinions expressed below, we have reviewed the following documents:
Surf Air Mobility Inc., p. 2
In addition, we have reviewed the originals or copies certified or otherwise identified to our satisfaction of all such corporate records of the Company and such other documents, and we have made such investigations of law, as we have deemed appropriate as a basis for the opinions expressed below.
In rendering the opinions expressed below, we have assumed the authenticity of all documents submitted to us as originals and the conformity to the originals of all documents submitted to us as copies. In addition, we have assumed and have not verified the accuracy as to factual matters of each document we have reviewed (including, without limitation, the accuracy of the representations and warranties of the Company in the Purchase Agreement).
Based on the foregoing, and subject to the further assumptions and qualifications set forth below, it is our opinion that:
Insofar as the foregoing opinions relate to the validity, binding effect or enforceability of any agreement or obligation of the Company, (a) we have assumed that the Company and each other party to such agreement or obligation has satisfied those legal requirements that are applicable to it to the extent necessary to make such agreement or obligation enforceable against it (except no such assumption is made as to the Company regarding matters of the General Corporation Law of the State of Delaware that in our experience normally would be applicable to general business entities with respect to such agreement or obligation) and (b) such opinions are subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and to general principles of equity. In particular, we express no opinion as to the validity, binding effect or enforceability of any provision of the Warrants that may require a party to pay, as damages, an amount that is held to be a penalty because it is disproportionate to the actual damages suffered.
The foregoing opinions are limited to the General Corporation Law of the State of Delaware, including the applicable provisions of the Delaware Constitution and reported judicial decisions interpreting such laws.
Surf Air Mobility Inc., p. 3
We hereby consent to the use of our name in the Final Prospectus Supplement under the heading “Legal Matters” as counsel for the Company that has passed on the validity of the applicable securities offered thereby and to the filing of this opinion as an exhibit to the Company’s Current Report on Form 8-K dated November 12, 2025. In giving such consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission thereunder.
The opinions expressed herein are rendered on and as of the date hereof, and we assume no obligation to advise you or any other person, or to make any investigations, as to any legal developments or factual matters arising subsequent to the date hereof that might affect the opinions expressed herein.
Very truly yours,
CLEARY GOTTLIEB STEEN & HAMILTON LLP
By: /s/ J.T. Ho_________________________________
J.T. Ho, a Partner
Exhibit 10.1
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of November 10, 2025, is by and among Surf Air Mobility Inc., a Delaware corporation with offices located at 12111 S. Crenshaw Blvd., Hawthorne, CA 90250 (the “Company”), and each of the investors listed on the Schedule of Buyers attached hereto (individually, a “Buyer” and collectively, the “Buyers”).
RECITALS
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and each Buyer hereby agree as follows:
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Each Buyer, severally and not jointly, represents and warrants to the Company with respect to only itself that, as of the date hereof and as of the Closing Date:
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The Company represents and warrants to each of the Buyers that, as of the date hereof and as of the Closing Date:
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Neither of the Company nor any of its Subsidiaries will use, directly or indirectly, any part of the proceeds of the transactions contemplated by this Agreement or any of the Transaction Documents in any manner that would constitute a violation of Anti-Corruption Laws.
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Note Legend
THE ISSUANCE AND SALE OF NEITHER THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES THAT MAY BE ISSUABLE PURSUANT TO THIS NOTE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. UNTIL THE DATE THAT IS ONE (1) YEAR AFTER THE ISSUE DATE (AS DEFINED ON THE REVERSE OF THIS NOTE), THE SECURITIES MAY
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NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION AND PROSPECTUS-DELIVERY REQUIREMENTS OF THE SECURITIES ACT.
Note Shares Legend
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
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In the event that the Closing shall not have occurred with respect to a Buyer within five (5) Business Days of the date hereof, then such Buyer shall have the right to terminate its obligations under this Agreement with respect to itself at any time on or after the close of business on such date without liability of such Buyer to any other party; provided, however, (i) the right to terminate this Agreement under this Section 8 shall not be available to such Buyer if the failure of the transactions contemplated by this Agreement to have been consummated by such date is the result of such Buyer’s breach of this Agreement and (ii) the abandonment of the sale and purchase of the
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Securities shall be applicable only to such Buyer providing such written notice; provided further that no such termination shall affect any obligation of the Company under this Agreement to reimburse such Buyer for the expenses described in Section 4(g) above. Nothing contained in this Section 8 shall be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or the other Transaction Documents or to impair the right of any party to compel specific performance by any other party of its obligations under this Agreement or the other Transaction Documents.
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If to the Company:
[ ]
Telephone: [ ]
Attention: [ ]
E-Mail: [ ]
With a copy (for informational purposes only) to:
[ ]
Attention: [ ]
E-mail: [ ]
If to the Transfer Agent:
[ ]
E-mail: [ ]
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If to a Buyer, to (i) its e-mail address set forth on the Schedule of Buyers, with copies to such Buyer’s representatives as set forth on the Schedule of Buyers and (ii) to [ ].
with a copy (for informational purposes only) to:
[ ]
Attention: [ ]
E-mail: [ ]
or to such other address, e-mail address and/or to the attention of such other Person as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) electronically generated by the sender’s e-mail or (C) provided by an overnight courier service shall be rebuttable evidence of personal service, receipt by e-mail or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively.
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[Signature Pages Follow]
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IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written above.
COMPANY:
SURF AIR MOBILITY INC.
By:
Name:
Title:
[Signature Page to Securities Purchase Agreement]
IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written above.
BUYER:
By:
Name:
Title:
[Signature Page to Securities Purchase Agreement]
Exhibit 10.2
FORM OF WARRANT
WARRANT TO PURCHASE SHARES OF COMMON STOCK
SURF AIR MOBILITY INC.
Warrant Shares: [ ] |
Original Issuance Date: [ ], 2025 |
THIS WARRANT TO PURCHASE SHARES OF COMMON STOCK (this “Warrant”) certifies that, for value received, HT Investments MA LLC, 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 or times on or after the Original Issuance Date (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on the two year anniversary of the Initial Exercise Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from Surf Air Mobility Inc., a Delaware corporation (the “Company”), up to [ ] shares of Common Stock, par value $0.0001 per share (the “Common Stock”), of the Company (as subject to adjustment hereunder, the “Warrant Shares”). The purchase price of one Warrant Share under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement (the “Securities Purchase Agreement”), dated as of [ ], 2025, among the Company, the Holder and the other Buyers party thereto.
2. Exercise.
(a) Exercise of Warrant. Subject to Section 2(c), 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 in the form annexed hereto (the “Notice of Exercise”). Within one (1) Trading Day 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(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise on the Trading Day of receipt of such notice if received before 4:30 PM (Eastern Time) or the following Trading Day if received thereafter. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
(b) Exercise Price. The exercise price per share of Common Stock under this Warrant, shall be $3.32 per share, subject to adjustment hereunder (the “Exercise Price”).
(c) Cashless Exercise. Notwithstanding anything to the contrary set forth herein, if at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein is not available for the issuance of the Warrant Shares to the Holder or the resale of Warrant Shares by the Holder, then this Warrant may be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
(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 of 1933, as amended (the “Securities Act”), the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not to take any position contrary to this Section 2(c).
“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the Common Stock is not then listed or quoted on a Trading Market and if the Common Stock is listed or quoted for trading on the OTC Market Group’s OTCQB exchange (“OTCQB”) or OTCQX exchange (“OTCQX”) (or any successors to either of the foregoing) , the VWAP of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock so reported, or (d) in all other cases, the fair market value of a share of the 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.
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“Business Day” means any day other than a Saturday, a Sunday or any day on which commercial banks in The City of New York are authorized or required by law or executive order to close or be closed; provided, however, for clarification, commercial banks in The City of New York shall not be deemed to be authorized or required by law or executive order to close or be closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are open for use by customers on such day.
“Closing Sale Price” means, for any security as of any date, the last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing trade price then the last trade price, of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last trade price of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last trade price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no last trade price is reported for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported in the OTC Link or on the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.
“Equity Conditions” will be deemed to be satisfied as of any date if all of the following conditions are satisfied as of such date and on each of the twenty (20) previous Trading Days: (A) the shares issuable pursuant to this Warrant are Freely Tradable; (B) the Holder is not in possession of any material non-public information; (C) the issuance of such shares will not be limited by Section 2(d)(viii), provided that if the only condition preventing a Forced Exercise is this clause (C), then the Company may effect a Forced Exercise up to the limit set forth in Section 2(d)(viii); (D) such shares will satisfy Section 5(e); (E) no pending, proposed or intended Fundamental Transaction has occurred that has not been abandoned, terminated or consummated; (F) no delisting or suspension by the principal, in terms of volume, Eligible Exchange on which the Company is then listed or traded has been threatened (with a reasonable prospect of delisting or suspension occurring after giving effect to all applicable notice, appeal, compliance and hearing periods) or is reasonably likely to occur or pending as evidenced by (x) a writing by such Eligible Exchange or (y) the Company falling below the minimum listing maintenance requirements, if applicable, of such Eligible Exchange; (G) the daily dollar trading volume (as reported on Bloomberg) of the Common Stock on the New York Stock Exchange is not less than five million dollars ($5,000,000), provided, however, this clause (G) shall be deemed to be satisfied if such condition is met for at least eighteen (18) out of the twenty (20) previous Trading Days; and (H) no Event of Default (as defined in the Convertible Note) will have occurred that has not been waived and no Default (as defined in the Convertible Note) will have occurred and be continuing which has not been waived.
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“Forced Conversion Notice” means a “Company Conversion Notice” as defined in the Convertible Note.
“Freely Tradable” means, with respect to any shares of Common Stock issued or issuable pursuant to this Warrant, that such shares are (or when issued, will be) issued by the Company (i) pursuant to an effective registration statement not subject to any “stop order” by the Commission (as defined below) or (ii) pursuant to Section 3(a)(9) of the Securities Act, and, in each case, issued without any restrictive legend or stop‑transfer instructions on transfer.
“Principal Market” means The New York Stock Exchange.
“Trading Market” means any of the following markets or exchanges on which the shares of Common Stock are listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Stock Market LLC, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, or the New York Stock Exchange (or any successors to any of the foregoing).
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the Common Stock is not then listed or quoted on a Trading Market and if the Common Stock is listed or quoted for trading on OTCQB or OTCQX (or any successors to either of the foregoing), the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
(d) Mechanics of Exercise
(i) Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company (“DTC”) through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and the Warrant Shares are Freely Tradable, and otherwise by physical delivery of the Warrant Shares, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by one (1) Trading Day after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon the date of delivery of the Notice of Exercise (the “Exercise Date”, the Holder shall be deemed for all corporate
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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 one (1) Trading Day following delivery of the Notice of Exercise; and provided further, that the Holder shall be deemed to have waived any voting rights of any such Warrant Shares that may arise during the period commencing on such Exercise Date, through, and including, such applicable Warrant Share Delivery Date, as necessary, such that the aggregate voting rights of any Common Stock (including such Warrant Shares) beneficially owned by the Holder and/or any Attribution Parties, collectively, shall not exceed the Beneficial Ownership Limitation (as defined below) as a result of any such exercise of this Warrant. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the third Trading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a registrar (which may be the Company’s transfer agent (the “Transfer Agent”)) that is a participant in the Fast Automated Securities Transfer Program (“FAST”) so long as this Warrant remains outstanding and exercisable.
(ii) Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.
(iii) Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
(iv) Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date (other than any such failure that is solely due to any action by the Holder with respect to such delivery of Warrant Shares), and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of
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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 shares of 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 shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.
(v) No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either (x) pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or (y) round up to the next whole share of Common Stock.
(vi) Charges, Taxes and Expenses. The issuance and delivery of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
(vii) Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.
(viii) 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 (i) the Holder’s Affiliates, (ii) any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates, and (iii) any other Persons whose beneficial ownership of the shares of Common Stock would or could be aggregated with the Holder’s for the purposes of Section 13(d) (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of Warrant Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of Warrant Shares which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the
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Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other securities of the Company or its Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock (collectively “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(d)(viii), 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(d)(viii) 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, and the Company shall have no obligation to verify or confirm the accuracy of such determination. For purposes of this Section 2(d)(viii), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Securities and Exchange Commission (the “Commission”), as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock outstanding at the close of business on the prior Business Day. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of the Warrant Shares 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(d)(viii), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of Warrant Shares upon exercise of this Warrant held by the Holder and the provisions of this Section 2(d)(viii) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(d)(viii) to correct this paragraph (or any portion
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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. If the Warrant is unexercisable as a result of the Holder’s Beneficial Ownership Limitation, no alternate consideration is owing to the Holder.
(e) Forced Exercise. If the Forced Exercise Trigger occurs, then the Company may, at its sole discretion, deliver written notice to the Holder (a “Forced Exercise Notice”) requiring the Holder to exercise all or any portion of this Warrant (a “Forced Exercise”) (i) for cash, if at the time the Forced Exercise Notice is delivered there is an effective registration statement registering, and the prospectus contained therein is available for, the issuance or resale of the Warrant Shares, or (ii) otherwise, by cashless exercise pursuant to Section 2(c), and certifying that the Equity Conditions have been satisfied on the date the Forced Exercise Notice was delivered to the Holder; provided that (x) no Forced Exercise will be effected unless the Equity Conditions are satisfied on each Trading Day from the date of the Forced Exercise Notice until the corresponding Warrant Shares are delivered by the Company, (y) if the Company receives a Notice of Exercise prior to the date the Company delivers a Forced Exercise Notice and any Warrant Shares due thereunder remain undelivered by the Company, the Forced Exercise may not occur until after such Warrant Shares are delivered to the Holder and (z) the number of Warrant Shares subject to any Forced Exercise shall be reduced, on a share-for-share basis, by the number of Warrant Shares that the Holder exercised pursuant to any voluntary Notices of Exercise delivered prior to the Forced Exercise Date. The Forced Exercise shall be effective as of the date the Forced Exercise Notice is delivered to the Holder (the “Forced Exercise Date”), and the Company shall deliver the applicable Warrant Shares as if the Holder had delivered a Notice of Exercise on the Forced Exercise Date using the applicable settlement method. The Company may not deliver more than one notice, whether a Forced Exercise Notice with respect to this Warrant or a Forced Conversion Notice with respect to the Convertible Note, in any rolling ten (10) Trading Day period.
3. Certain Adjustments.
(a) Share Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a share dividend or otherwise makes a distribution or distributions on shares of Common Stock or any other equity or Common Stock Equivalents payable in shares of Common Stock (which, for avoidance of doubt, shall not include any Warrant Shares issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant remains unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification.
(b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase shares, warrants, securities or other property pro rata to the record holders of any class of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had
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held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
(c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, shares or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation). 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 and delivered (in proportionate part in the case of a partial exercise) together with the applicable Warrant Shares if and when the Warrant is exercised.
(d) Fundamental Transaction. If (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 the Company’s assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of greater than 50% of the outstanding shares of Common Stock or greater than 50% 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 shares of Common Stock or any compulsory share exchange pursuant to which the shares of 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 greater than 50% of the outstanding shares of Common Stock or greater than 50% of the voting power of the common equity of the Company (each a “Fundamental Transaction”), then, upon any subsequent
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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(d)(viii) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(d)(viii) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or within thirty (30) days after, the consummation of the Fundamental Transaction (or, if later, the date of the public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder, as described below, an amount of cash equal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction, provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by the Company’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity, as of the date of the consummation of such Fundamental Transaction, the same type or form of consideration (and in the same proportion), valued at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to the holders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or any combination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connection with the Fundamental Transaction; provided further, that if holders of Common Stock of the Company are not offered or paid any consideration in such Fundamental Transaction, such holders of Common Stock will be deemed to have received shares of the Successor Entity (which Successor Entity may be the Company following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of (1) the 30 day volatility, (2) the 100 day volatility or (3) the 365 day volatility, each of clauses (1)-(3) as obtained from the HVT function on Bloomberg (determined utilizing a 365-day annualization factor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading Day immediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicable Fundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(d) and (D) a remaining option time equal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) a zero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds within five Business Days of the Holder’s election (or, if later,
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on the effective date of the 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(d) pursuant to written agreements in form and substance reasonably satisfactory to the Holder prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall 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(d) regardless of whether (i) the Company has sufficient authorized shares of Common Stock for the issuance of Warrant Shares; (ii) a Fundamental Transaction occurs prior to the Initial Exercise Date; and/or (iii) the Requisite Stockholder Approval (as defined in the Securities Purchase Agreement) has been obtained .
(e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share of Common Stock, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
(f) Notice to Holder.
(i) Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
(ii) Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer of all or substantially all of its assets,
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or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its 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 Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
(g) Voluntary Adjustment By Company. At any time, subject to the rules and regulations of the Trading Market and applicable law, the Company may at any time during the term of this Warrant, subject to the prior written consent of the Holder, reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors of the Company.
4. Transfer of Warrant.
(a) Transferability. This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
(b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the
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names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
(c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.
5. Miscellaneous.
(a) Currency. All dollar amounts referred to in this Warrant are in United States Dollars (“U.S. Dollars”). All amounts owing under this Warrant shall be paid in U.S. Dollars. All amounts denominated in other currencies shall be converted in the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange Rate” means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Warrant, the U.S. Dollar exchange rate as published in the Wall Street Journal (New York edition) on the relevant date of calculation.
(b) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required to net cash settle an exercise of this Warrant.
(c) 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.
(d) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Trading Day, then such action may be taken or such right may be exercised on the next succeeding Trading Day.
(e) Authorized Shares. The Company covenants that during the period that the Warrant is outstanding, it will reserve from its authorized and unissued shares of Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued and delivered, as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares underlying this Warrant which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon
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exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any shares of Common Stock 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 shares of Common Stock upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.
(f) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Securities Purchase Agreement. For the avoidance of doubt, this Warrant shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflicts of law principles.
(g) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not Freely Tradable, will have restrictions upon resale imposed by state, federal or foreign securities laws.
(h) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant or the Securities 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.
(i) Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Securities Exchange Agreement.
(j) 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 shares of Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.
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(k) 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.
(l) 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.
(m) Amendment. Other than Section 2(d)(viii) and this Section 5(m), which may not be modified, amended or waived, this Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.
(n) 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.
(o) 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.
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(Signature Page Follows)
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
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SURF AIR MOBILITY INC. |
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EXHIBIT A
NOTICE OF EXERCISE
TO: SURF AIR MOBILITY INC.
(1) The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any. In exercising the Warrant, the undersigned hereby confirms and acknowledges that the representations set forth in the Warrant as they apply to the undersigned are true and complete as of this date.
(2) Payment shall take the form of (check applicable box(es)):
☐ in lawful money of the United States; and/
☐ if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).
(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
Box A ☐ The Warrant Shares are to be issued in unrestricted form and shall be delivered to the following DWAC Account Number. The undersigned hereby certifies that such shares are being received pursuant to an effective registration statement, it will sell the shares to be delivered pursuant to an effective registration statement or otherwise pursuant to an exemption from registration, or such shares are being issued pursuant to the cashless exercise procedure set forth in subsection 2(c).
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Box B ☐ The Warrant Shares are to be issued in restricted form and shall be delivered physically, registered in the Company’s share register in the name of the undersigned or its designee specified below
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Name of Investing Entity:
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Signature of Authorized Signatory of Investing Entity: _____________________________________________________________________________________ |
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Title of Authorized Signatory: _____________________________________________________________________________________ |
Date: ____________________________________________________________________________________ |
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EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
Name: _____________________________________________________________________________ |
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Address: ___________________________________________________________________________ |
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Phone Number: _____________________________________________________________________ |
Email Address: _____________________________________________________________________ |
Dated: ____________________________________________________________________________ |
Holder’s Signature: __________________________________________________________________ |
Holder’s Address: ___________________________________________________________________ |
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Exhibit 10.3
THIS SECURITY AND ANY SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR (B) AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
WARRANT TO PURCHASE SHARES OF COMMON STOCK
SURF AIR MOBILITY INC.
Warrant Shares: [ ] |
Original Issuance Date: [ ], 2025 |
THIS WARRANT TO PURCHASE SHARES OF COMMON STOCK (this “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 or times on or after the Original Issuance Date (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on the two year anniversary of the Initial Exercise Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from Surf Air Mobility Inc., a Delaware corporation (the “Company”), up to
[ ] shares of Common Stock, par value $0.0001 per share (the “Common Stock”), of the Company (as subject to adjustment hereunder, the “Warrant Shares”). The purchase price of one Warrant Share under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement (the “Securities Purchase Agreement”), dated as of [ ], 2025, among the Company, the Holder and the other Buyers party thereto.
2. Exercise.
(a) Exercise of Warrant. Subject to Section 2(c), 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 in the form annexed hereto (the “Notice of Exercise”). Within one (1) Trading Day 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(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting
in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise on the Trading Day of receipt of such notice if received before 4:30 PM (Eastern Time) or the following Trading Day if received thereafter. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
(b) Exercise Price. The exercise price per share of Common Stock under this Warrant, shall be $[ ] per share, subject to adjustment hereunder (the “Exercise Price”).
(c) Cashless Exercise. Notwithstanding anything to the contrary set forth herein, if at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein is not available for the resale of Warrant Shares by the Holder, then this Warrant may be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
(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 of 1933, as amended (the “Securities Act”), the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not to take any position contrary to this Section 2(c).
“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the Common Stock is not then listed or quoted on a Trading Market and if the Common Stock is listed or quoted for trading on the OTC Market Group’s OTCQB exchange (“OTCQB”) or OTCQX exchange (“OTCQX”) (or any successors to either of the
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foregoing) , the VWAP of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock so reported, or (d) in all other cases, the fair market value of a share of the 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.
“Business Day” means any day other than a Saturday, a Sunday or any day on which commercial banks in The City of New York are authorized or required by law or executive order to close or be closed; provided, however, for clarification, commercial banks in The City of New York shall not be deemed to be authorized or required by law or executive order to close or be closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are open for use by customers on such day.
“Closing Sale Price” means, for any security as of any date, the last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing trade price then the last trade price, of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last trade price of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last trade price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no last trade price is reported for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported in the OTC Link or on the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.
“Equity Conditions” will be deemed to be satisfied as of any date if all of the following conditions are satisfied as of such date and on each of the twenty (20) previous Trading Days: (A) the Holder is not in possession of any material non-public information; (B) the issuance of such shares will not be limited by Section 2(d)(viii), provided that if the only condition preventing a Forced Exercise is this clause (B), then the Company may effect a Forced Exercise up to the limit set forth in Section 2(d)(viii); (C) such shares will satisfy Section 5(e); (D) no pending, proposed or intended Fundamental Transaction has occurred that has not been abandoned, terminated or consummated; (E) no delisting or suspension by the principal, in terms of volume, Eligible Exchange on which the Company is then listed or traded has been threatened (with a reasonable prospect of delisting or suspension occurring after giving effect to all applicable notice, appeal, compliance and hearing periods) or is reasonably likely to occur or pending as evidenced by (x) a writing by such Eligible Exchange or (y) the Company falling below the minimum listing maintenance requirements, if applicable, of such Eligible Exchange; and (F) the daily dollar trading volume (as reported on Bloomberg) of the Common Stock on the New York Stock Exchange is not less than five million dollars
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($5,000,000), provided, however, this clause (G) shall be deemed to be satisfied if such condition is met for at least eighteen (18) out of the twenty (20) previous Trading Days.
“Freely Tradable” means, with respect to any shares of Common Stock issued or issuable pursuant to this Warrant, that such shares are (or when issued, will be) issued by the Company (i) pursuant to an effective registration statement not subject to any “stop order” by the Commission (as defined below) or (ii) pursuant to Section 3(a)(9) of the Securities Act, and, in each case, issued without any restrictive legend or stop‑transfer instructions on transfer.
“Principal Market” means The New York Stock Exchange.
“Trading Market” means any of the following markets or exchanges on which the shares of Common Stock are listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Stock Market LLC, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, or the New York Stock Exchange (or any successors to any of the foregoing).
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the Common Stock is not then listed or quoted on a Trading Market and if the Common Stock is listed or quoted for trading on OTCQB or OTCQX (or any successors to either of the foregoing), the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
(d) Mechanics of Exercise
(i) Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company (“DTC”) through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and the Warrant Shares are Freely Tradable, and otherwise by physical delivery of the Warrant Shares, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by one (1) Trading Day after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon the date of delivery of the Notice of Exercise (the “Exercise Date”, the Holder shall be deemed for all corporate
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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 one (1) Trading Day following delivery of the Notice of Exercise; and provided further, that the Holder shall be deemed to have waived any voting rights of any such Warrant Shares that may arise during the period commencing on such Exercise Date, through, and including, such applicable Warrant Share Delivery Date, as necessary, such that the aggregate voting rights of any Common Stock (including such Warrant Shares) beneficially owned by the Holder and/or any Attribution Parties, collectively, shall not exceed the Beneficial Ownership Limitation (as defined below) as a result of any such exercise of this Warrant. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the third Trading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a registrar (which may be the Company’s transfer agent (the “Transfer Agent”)) that is a participant in the Fast Automated Securities Transfer Program (“FAST”) so long as this Warrant remains outstanding and exercisable.
(ii) Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.
(iii) Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
(iv) Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date (other than any such failure that is solely due to any action by the Holder with respect to such delivery of Warrant Shares), and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of
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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 shares of 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 shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.
(v) No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either (x) pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or (y) round up to the next whole share of Common Stock.
(vi) Charges, Taxes and Expenses. The issuance and delivery of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
(vii) Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.
(viii) 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 (i) the Holder’s Affiliates, (ii) any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates, and (iii) any other Persons whose beneficial ownership of the shares of Common Stock would or could be aggregated with the Holder’s for the purposes of Section 13(d) (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of Warrant Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of Warrant Shares which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the
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Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other securities of the Company or its Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock (collectively “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(d)(viii), 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(d)(viii) 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 the responsibility of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s representation to the Company that 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 may, but shall have no obligation to, verify or confirm the accuracy of such representation. 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, and the Company shall have no obligation to verify or confirm the accuracy of such determination. For purposes of this Section 2(d)(viii), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Securities and Exchange Commission (the “Commission”), as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock outstanding at the close of business on the prior Business Day. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of the Warrant Shares issuable upon exercise of this Warrant. 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(d)(viii) 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. If the Warrant is unexercisable as a result of the Holder’s Beneficial Ownership Limitation, no alternate consideration is owing to the Holder.
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(e) Forced Exercise. If the Forced Exercise Trigger occurs, then the Company may, at its sole discretion, deliver written notice to the Holder (a “Forced Exercise Notice”) requiring the Holder to exercise all or any portion of this Warrant (a “Forced Exercise”) (i) for cash, if at the time the Forced Exercise Notice is delivered there is an effective registration statement registering, and the prospectus contained therein is available for, the resale of the Warrant Shares, or (ii) otherwise, by cashless exercise pursuant to Section 2(c), and certifying that the Equity Conditions have been satisfied on the date the Forced Exercise Notice was delivered to the Holder; provided that (x) no Forced Exercise will be effected unless the Equity Conditions are satisfied on each Trading Day from the date of the Forced Exercise Notice until the corresponding Warrant Shares are delivered by the Company, (y) if the Company receives a Notice of Exercise prior to the date the Company delivers a Forced Exercise Notice and any Warrant Shares due thereunder remain undelivered by the Company, the Forced Exercise may not occur until after such Warrant Shares are delivered to the Holder and (z) the number of Warrant Shares subject to any Forced Exercise shall be reduced, on a share-for-share basis, by the number of Warrant Shares that the Holder exercised pursuant to any voluntary Notices of Exercise delivered prior to the Forced Exercise Date. The Forced Exercise shall be effective as of the date the Forced Exercise Notice is delivered to the Holder (the “Forced Exercise Date”), and the Company shall deliver the applicable Warrant Shares as if the Holder had delivered a Notice of Exercise on the Forced Exercise Date using the applicable settlement method. The Company may not deliver more than one Forced Exercise Notice in any rolling ten (10) Trading Day period.
3. Certain Adjustments.
(a) Share Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a share dividend or otherwise makes a distribution or distributions on shares of Common Stock or any other equity or Common Stock Equivalents payable in shares of Common Stock (which, for avoidance of doubt, shall not include any Warrant Shares issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant remains unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification.
(b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase shares, warrants, securities or other property pro rata to the record holders of any class of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such
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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).
(c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, shares or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation). 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 and delivered (in proportionate part in the case of a partial exercise) together with the applicable Warrant Shares if and when the Warrant is exercised.
(d) Fundamental Transaction. If (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 the Company’s assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of greater than 50% of the outstanding shares of Common Stock or greater than 50% 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 shares of Common Stock or any compulsory share exchange pursuant to which the shares of 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 greater than 50% of the outstanding shares of Common Stock or greater than 50% 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(d)(viii) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(d)(viii) on the exercise of this Warrant). For purposes of any
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such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or within thirty (30) days after, the consummation of the Fundamental Transaction (or, if later, the date of the public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder, as described below, an amount of cash equal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction, provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by the Company’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity, as of the date of the consummation of such Fundamental Transaction, the same type or form of consideration (and in the same proportion), valued at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to the holders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or any combination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connection with the Fundamental Transaction; provided further, that if holders of Common Stock of the Company are not offered or paid any consideration in such Fundamental Transaction, such holders of Common Stock will be deemed to have received shares of the Successor Entity (which Successor Entity may be the Company following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of (1) the 30 day volatility, (2) the 100 day volatility or (3) the 365 day volatility, each of clauses (1)-(3) as obtained from the HVT function on Bloomberg (determined utilizing a 365-day annualization factor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading Day immediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicable Fundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(d) and (D) a remaining option time equal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) a zero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds within five Business Days of the Holder’s election (or, if later, on the effective date of the 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(d) pursuant to written agreements in form and substance reasonably satisfactory to the Holder prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent
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to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall 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(d) regardless of whether (i) the Company has sufficient authorized shares of Common Stock for the issuance of Warrant Shares; and/or (ii) a Fundamental Transaction occurs prior to the Initial Exercise Date.
(e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share of Common Stock, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
(f) Notice to Holder.
(i) Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
(ii) Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer of all or substantially all of its assets, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its 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 Common Stock
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of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
(g) Voluntary Adjustment By Company. At any time, subject to the rules and regulations of the Trading Market and applicable law, the Company may at any time during the term of this Warrant, subject to the prior written consent of the Holder, reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors of the Company.
4. Transfer of Warrant.
(a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) 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 duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
(b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
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(c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.
(d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws or (ii) without volume or manner-of-sale restrictions or current public information requirements permitted pursuant to Rule 144, the Company may require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, provide to the Company an opinion of counsel 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 this Warrant under the Securities Act.
(e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that (i) it is an “accredited investor” as defined in Regulation D promulgated under the Securities Act and (ii) 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.
5. Miscellaneous.
(a) Currency. All dollar amounts referred to in this Warrant are in United States Dollars (“U.S. Dollars”). All amounts owing under this Warrant shall be paid in U.S. Dollars. All amounts denominated in other currencies shall be converted in the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange Rate” means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Warrant, the U.S. Dollar exchange rate as published in the Wall Street Journal (New York edition) on the relevant date of calculation.
(b) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required to net cash settle an exercise of this Warrant.
(c) 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.
(d) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Trading Day, then such action may be taken or such right may be exercised on the next succeeding Trading Day.
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(e) Authorized Shares. The Company covenants that during the period that the Warrant is outstanding, it will reserve from its authorized and unissued shares of Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued and delivered, as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares underlying this Warrant which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any shares of Common Stock 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 shares of Common Stock upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.
(f) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Securities Purchase Agreement. For the avoidance of doubt, this Warrant shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflicts of law principles.
(g) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not Freely Tradable, will have restrictions upon resale imposed by state, federal or foreign securities laws.
(h) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant or the Securities 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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(i) Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Securities Exchange Agreement.
(j) 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 shares of Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.
(k) 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.
(l) 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.
(m) Amendment. Other than Section 2(d)(viii) and this Section 5(m), which may not be modified, amended or waived, this Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.
(n) 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.
(o) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
********************
(Signature Page Follows)
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
SURF AIR MOBILITY INC.
By: _____________________________
Name:
Title:
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EXHIBIT A
NOTICE OF EXERCISE
TO: SURF AIR MOBILITY INC.
(1) The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any. In exercising the Warrant, the undersigned hereby confirms and acknowledges that the representations set forth in the Warrant as they apply to the undersigned are true and complete as of this date.
(2) Payment shall take the form of (check applicable box(es)):
☐ in lawful money of the United States; and/
☐ if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).
(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
_______________________________
Box A ☐ The Warrant Shares are to be issued in unrestricted form and shall be delivered to the following DWAC Account Number. The undersigned hereby certifies that such shares are being resold pursuant to an effective registration statement or such shares are being issued pursuant to the cashless exercise procedure set forth in subsection 2(c) and resold pursuant to Rule 144.
_______________________________
_______________________________
Box B ☐ The Warrant Shares are to be issued in restricted form and shall be delivered physically, registered in the Company’s share register in the name of the undersigned or its designee specified below
_______________________________
_______________________________
[ ]
Name of Investing Entity:
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_____________________________________________________________________________________
Signature of Authorized Signatory of Investing Entity:
_____________________________________________________________________________________
Title of Authorized Signatory:
_____________________________________________________________________________________
Date:
_____________________________________________________________________________________
EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
Name: _____________________________________________________________________________
(Please Print)
Address: ___________________________________________________________________________
(Please Print)
Phone Number: _____________________________________________________________________
Email Address: _____________________________________________________________________
Dated: ____________________________________________________________________________
Holder’s Signature: __________________________________________________________________
Holder’s Address: ___________________________________________________________________
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Exhibit 10.4
SURF AIR MOBILITY INC.
Senior Secured Convertible Note due 2028
THE ISSUANCE AND SALE OF NEITHER THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES THAT MAY BE ISSUABLE PURSUANT TO THIS NOTE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. UNTIL THE DATE THAT IS ONE (1) YEAR AFTER THE ISSUE DATE (AS DEFINED ON THE REVERSE OF THIS NOTE), THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION AND PROSPECTUS-DELIVERY REQUIREMENTS OF THE SECURITIES ACT.
SURF AIR MOBILITY INC.
Senior Secured Convertible Note due 2028
Certificate No. A-1
SURF AIR MOBILITY INC., a Delaware corporation (the “Company”), for value received, promises to pay to [ ] (the “Initial Holder”), or its registered assigns, one hundred five percent (105%) of the principal sum of seventy four million dollars ($74,000,000) (such principal sum, the “Principal Amount” and one hundred five percent (105%) of such Principal Amount, the “Maturity Principal Amount”) on October 31, 2028, and to pay any outstanding interest thereon, as provided in this Note, in each case, as provided in and subject to the other provisions of this Note, including the earlier redemption, repurchase or conversion of this Note.
Unless otherwise indicated, references herein to “dollars” or “$” are to U.S. dollars.
Additional provisions of this Note are set forth on the other side of this Note.
[The Remainder of This Page Intentionally Left Blank; Signature Page Follows]
IN WITNESS WHEREOF, Surf Air Mobility Inc. has caused this instrument to be duly executed as of the date set forth below.
SURF AIR MOBILITY INC.
Date: November 12, 2025 By:
Name:
Title:
(Signature Page to Senior Secured Convertible Note due 2028, Certificate No. A-1)
SURF AIR MOBILITY INC.
Senior Secured Convertible Note due 2028
This Note (this “Note” and, collectively with any Note issued in exchange therefor or in substitution thereof, the “Notes”) is issued by SURF AIR MOBILITY INC., a Delaware corporation (the “Company”), and designated as its “Senior Secured Convertible Notes due 2028.”
“Affiliate” has the meaning set forth in Rule 144 under the Securities Act.
“ATM Sales Agreement” has the meaning set forth in Section 8(X).
“Cash Sweep Amount” means, (A) with respect to all Cash Sweep Financings (other than Cash Sweep Dispositions) occurring on or after November 10, 2025 and prior to March 1, 2026, fifty percent (50%) of the gross proceeds to the Company from all such financings; provided that
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in no event will the Cash Sweep Amount for such Cash Sweep Financings exceed an amount equal to (i) $6,000,000, minus (ii) the sum of (x) fifty percent (50%) of the Special Redemption Price that has been paid pursuant to Section 4(F) hereof prior to March 1, 2026 and (y) fifty percent (50%) of the principal amount of this Note that has been converted pursuant to Section 7 hereof prior to March 1, 2026 and (B) with respect to all Cash Sweep Dispositions, fifty percent (50%) of the gross cash or cash equivalents proceeds to the Company from all such Cash Sweep Dispositions.
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“Equity Interest” shall mean, with respect to any Person, any and all shares, interests, participations or other equivalents, including preferred stock or membership interests (however designated, whether voting or non-voting), of equity of such Person, including, if such Person is a partnership, partnership interests (whether general or limited) and including, without limitation, any “equity security” (as that term is defined under Rule 405 promulgated under the Securities Act), and any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, such partnership.
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For purposes of this definition, (x) any transaction or event described in both clause (A) and in clause (B) above (without regard to the proviso in clause (B)) will be deemed to occur solely pursuant to clause (B) above (subject to such proviso); and (y) whether a Person is a “beneficial owner” and whether shares are “beneficially owned” will be determined in accordance with Rule 13d-3 under the Exchange Act.
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“Fundamental Change Repurchase Date” means the date as of which this Note must be repurchased for cash in connection with a Fundamental Change, as provided in Section 6(B).
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“Permitted Intellectual Property Licenses” means (A) Intellectual Property licenses actually disclosed pursuant to the Securities Purchase Agreement as of the date of the Securities Purchase Agreement, (B) non-perpetual Intellectual Property licenses granted in the ordinary
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course of business on arm’s length terms consisting of the licensing of technology, the development of technology or the providing of technical support which may include licenses with unlimited renewal options solely to the extent such options require mutual consent for renewal or are subject to financial or other conditions as to the ability of licensee to perform under the license; provided such license was not entered into during an Event of Default or continuance of a Default and (C) licenses granted in connection with the Palantir Agreements or any SurfOS assets.
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“Reference Property” has the meaning set forth in Section 7(I)(i)(4).
“Required Holders” has the meaning set forth in the Securities Purchase Agreement.
“Required Reserve Amount” has the meaning in Section 8(Q).
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“SurfOS” means the Company’s and its Subsidiaries’ current and future right, title and interest in and to the SaaS/AI software platform solution and any current and future related contracts, products, services and materials for the advanced air mobility industry (including, without limitation, urban and regional and commercial air transportation companies, OEMs, operators, leasing companies, maintenance services, charging networks, and other entities in the ecosystem), and all Intellectual Property (as defined in the Security Agreement) in any of the foregoing or related thereto.
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The Holder of this Note will be treated as the owner of this Note for all purposes.
This Note, and any Note issued in exchange therefor or in substitution thereof, will be in registered form, without coupons.
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To exercise such right, the Holder must deliver notice of such exercise to the Company, specifying whether the Holder has elected clause (1) or (2) above to apply. If the Holder has elected clause (1) to apply, then the Company’s obligation to deliver the Undelivered Shares in accordance with this Note will be deemed to have been satisfied and discharged to the extent the Company has paid the Covering Price in accordance with clause (1). Nothing herein shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock as required pursuant to the terms hereof. In addition to the foregoing, if the Company fails for any reason to deliver Common Stock to the Holder by the applicable Conversion Settlement Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each one thousand dollars ($1,000) of Undelivered Shares (based on the Daily VWAP on the applicable Conversion Settlement Date), ten dollars ($10) per Trading Day through the earlier of (x) the fifth (5th) Trading Day after such liquidated damages begin to accrue) and (y) the date that the cash amount set forth in Section 7(E)(v)(1) is paid to the Holder or the shares of Common Stock are delivered to the Holder pursuant to Section 7(E)(v)(2).
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where:
CR0 = the Conversion Rate in effect immediately before the Open of Business on the Ex-Dividend Date for such dividend or distribution, or immediately before the Open of Business on the effective date of such stock split or stock combination, as applicable;
CR1 = the Conversion Rate in effect immediately after the Open of Business on such Ex-Dividend Date or the Open of Business on such effective date, as applicable;
OS0 = the number of shares of Common Stock outstanding immediately before the Open of Business on such Ex-Dividend Date or effective date, as applicable, without giving effect to such dividend, distribution, stock split or stock combination; and
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OS1 = the number of shares of Common Stock outstanding immediately after giving effect to such dividend, distribution, stock split or stock combination.
If any dividend, distribution, stock split or stock combination of the type described in this Section 7(G)(i)(1) is declared or announced, but not so paid or made, then the Conversion Rate will be readjusted, effective as of the date the Board of Directors determines not to pay such dividend or distribution or to effect such stock split or stock combination, to the Conversion Rate that would then be in effect had such dividend, distribution, stock split or stock combination not been declared or announced.
where:
CR0 = the Conversion Rate in effect immediately before the Open of Business on the Ex-Dividend Date for such distribution;
CR1 = the Conversion Rate in effect immediately after the Open of Business on such Ex-Dividend Date;
OS = the number of shares of Common Stock outstanding immediately before the Open of Business on such Ex-Dividend Date;
X = the total number of shares of Common Stock issuable pursuant to such rights, Options or warrants; and
Y = a number of shares of Common Stock obtained by dividing (x) the aggregate price payable to exercise such rights, Options or warrants by (y) the average of the Last Reported Sale Price per share of Common Stock during the ten (10) consecutive Trading
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Days ending on, and including, the Trading Day immediately before the date such distribution is announced.
For purposes of this Section 7(G)(i)(2), in determining whether any rights, Options or warrants entitle holders of Common Stock to subscribe for or purchase shares of Common Stock at a price per share that is less than the average of the Last Reported Sale Price per share of Common Stock during the ten (10) consecutive Trading Days ending on, and including, the Trading Day immediately before the date the distribution of such rights, Options or warrants is announced, and in determining the aggregate price payable to exercise such rights, Options or warrants, there will be taken into account any consideration the Company receives for such rights, Options or warrants and any amount payable on exercise thereof, with the value of such consideration, if not cash, to be determined by the Board of Directors in good faith.
(v) dividends, distributions, rights, Options or warrants for which an adjustment to the Conversion Rate is required pursuant to Section 7(G)(i)(1) or Section 7(G)(i)(2);
(w) dividends or distributions paid exclusively in cash for which an adjustment to the Conversion Rate is required pursuant to Section 7(G)(i)(4);
(x) rights issued or otherwise distributed pursuant to a stockholder rights plan, except to the extent provided in Section 7(G)(vii);
(y) Spin-Offs for which an adjustment to the Conversion Rate is required pursuant to Section 7(G)(i)(3)(b); and
(z) a distribution solely pursuant to a Common Stock Change Event, as to which Section 7(I) will apply,
then the Conversion Rate will be increased based on the following formula:
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where:
CR0 = the Conversion Rate in effect immediately before the Open of Business on the Ex-Dividend Date for such distribution;
CR1 = the Conversion Rate in effect immediately after the Open of Business on such Ex-Dividend Date;
SP = the average of the Last Reported Sale Prices per share of Common Stock during the ten (10) consecutive Trading Days ending on, and including, the Trading Day immediately before such Ex-Dividend Date; and
FMV = the fair market value (as determined by the Board of Directors in good faith), as of such Ex-Dividend Date, of the shares of Capital Stock, evidences of indebtedness, assets, property, rights, Options or warrants distributed per share of Common Stock pursuant to such distribution;
provided, however, that if FMV is equal to or greater than SP, then, in lieu of the foregoing adjustment to the Conversion Rate, the Holder will receive, for each $1,000 Principal Amount of this Note held by this Holder on the record date for such distribution, at the same time and on the same terms as holders of Common Stock, the amount and kind of shares of Capital Stock, evidences of indebtedness, assets, property, rights, Options or warrants that such Holder would have received if such Holder had owned, on such record date, a number of shares of Common Stock equal to the Conversion Rate in effect on such record date.
where:
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CR0 = the Conversion Rate in effect immediately before the Open of Business on the Ex-Dividend Date for such Spin-Off;
CR1 = the Conversion Rate in effect immediately after the Open of Business on such Ex-Dividend Date;
FMV = the product of (x) the average of the Last Reported Sale Prices per share or unit of the Capital Stock or equity interests distributed in such Spin-Off over the ten (10) consecutive Trading Day period (the “Spin-Off Valuation Period”) beginning on, and including, such Ex-Dividend Date (such average to be determined as if references to Common Stock in the definitions of Last Reported Sale Price, Trading Day and Market Disruption Event were instead references to such Capital Stock or equity interests); and (y) the number of shares or units of such Capital Stock or equity interests distributed per share of Common Stock in such Spin-Off; and
SP = the average of the Last Reported Sale Prices per share of Common Stock for each Trading Day in the Spin-Off Valuation Period.
The adjustment to the Conversion Rate pursuant to this Section 7(G)(i)(3)(b) will be calculated as of the Close of Business on the last Trading Day of the Spin-Off Valuation Period but will be given effect immediately after the Open of Business on the Ex-Dividend Date for the Spin-Off, with retroactive effect. If a Note is converted and the Conversion Date occurs during the Spin-Off Valuation Period, then, notwithstanding anything to the contrary in this Note, the Company will, if necessary, delay the settlement of such conversion until the first (1st) Business Day after the last day of the Spin-Off Valuation Period on which the Common Stock is traded).
where:
CR0 = the Conversion Rate in effect immediately before the Open of Business on the Ex-Dividend Date for such dividend or distribution;
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CR1 = the Conversion Rate in effect immediately after the Open of Business on such Ex-Dividend Date;
SP = the Last Reported Sale Price per share of Common Stock on the Trading Day immediately before such Ex-Dividend Date; and
D = the cash amount distributed per share of Common Stock in such dividend or distribution;
provided, however, that if D is equal to or greater than SP, then, in lieu of the foregoing adjustment to the Conversion Rate, the Holder will receive, for each $1,000 Principal Amount of this Note held by the Holder on the record date for such dividend or distribution, at the same time and on the same terms as holders of Common Stock, the amount of cash that such Holder would have received if such Holder had owned, on such record date, a number of shares of Common Stock equal to the Conversion Rate in effect on such record date.
where:
CR0 = the Conversion Rate in effect immediately before the time (the “Expiration Time”) such tender or exchange offer expires;
CR1 = the Conversion Rate in effect immediately after the Expiration Time;
AC = the aggregate value (determined as of the Expiration Time by the Board of Directors in good faith) of all cash and other consideration paid for shares of Common Stock purchased or exchanged in such tender or exchange offer;
OS0 = the number of shares of Common Stock outstanding immediately before the Expiration Time (including all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer);
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OS1 = the number of shares of Common Stock outstanding immediately after the Expiration Time (excluding all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer); and
SP = the average of the Last Reported Sale Prices per share of Common Stock over the ten (10) consecutive Trading Day period (the “Tender/Exchange Offer Valuation Period”) beginning on, and including, the Trading Day immediately after the Expiration Date;
provided, however, that the Conversion Rate will in no event be adjusted down pursuant to this Section 7(G)(i)(5), except to the extent provided in the immediately following paragraph. The adjustment to the Conversion Rate pursuant to this Section 7(G)(i)(5) will be calculated as of the Close of Business on the last Trading Day of the Tender/Exchange Offer Valuation Period but will be given effect immediately after the Expiration Time, with retroactive effect. If a Note is converted and the Conversion Date occurs on the Expiration Date or during the Tender/Exchange Offer Valuation Period, then, notwithstanding anything to the contrary in this Note, the Company will, if necessary, delay the settlement of such conversion until the first (1st) Business Day after the last day of the Tender/Exchange Offer Valuation Period.
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then, solely for purposes of such conversion, the Company will, without duplication, give effect to such adjustment on such Conversion Date. In such case, if the date on which the Company is otherwise required to deliver the consideration due upon such conversion is before the first date on which the amount of such adjustment can be determined, then the
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Company will delay the settlement of such conversion until the first (1st) Business Day after such first date.
then (x) such Conversion Rate adjustment will not be given effect for such conversion; (y) the shares of Common Stock issuable upon such conversion based on such unadjusted Conversion Rate will not be entitled to participate in such dividend or distribution; and (z) there will be added, to the Conversion Consideration otherwise due upon such conversion, the same kind and amount of consideration that would have been delivered in such dividend or distribution with respect to such shares of Common Stock had such shares been entitled to participate in such dividend or distribution.
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and, in each case, as a result of such occurrence, the Common Stock is converted into, or is exchanged for, or represents solely the right to receive, other securities or other property (including cash or any combination of the foregoing) (such an event, a “Common Stock Change Event,” and such other securities or other property, the “Reference Property,” and the amount and kind of Reference Property that a holder of one (1) share of Common Stock would be entitled to receive on account of such Common Stock Change Event (without giving effect to any arrangement not to issue fractional shares of securities or other property), a “Reference Property Unit”), then, notwithstanding anything to the contrary in this Note, at the effective time of such Common Stock Change Event, (x) the Conversion Consideration due pursuant to any Note will be determined in the same manner as if each reference to any number of shares of Common Stock in this Section 7 (or in any related definitions) were instead a reference to the same number of Reference Property Units; (y) for purposes of Section 7(A), each reference to any number of shares of Common Stock in such Section (or in any related definitions) will instead be deemed to be a reference to the same number of Reference Property Units; and (z) for purposes of the definition of “Fundamental Change,” the term “ Common Stock” and “common equity” will be deemed to mean the common equity, if any, forming part of such Reference Property. For these purposes, (I) the Daily VWAP of any Reference Property Unit or portion thereof that consists of a class of common equity securities will be determined by reference to the definition of “Daily VWAP,” substituting, if applicable, the Bloomberg page for such class of securities in such definition; and (II) the Daily VWAP of any Reference Property Unit or portion thereof that does not consist of a class of common equity securities, and the Last Reported Sale Price of any Reference Property Unit or portion thereof that does not consist of a class of securities, will be the fair value of such Reference Property Unit or portion thereof, as applicable, determined in good faith by the Company (or, in the case of cash denominated in U.S. dollars, the face amount thereof).
If the Reference Property consists of more than a single type of consideration to be determined based in part upon any form of stockholder election, then the composition of
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the Reference Property Unit will be deemed to be the weighted average of the types and amounts of consideration actually received, per share of Common Stock, by the holders of Common Stock. The Company will notify the Holder of such weighted average as soon as practicable after such determination is made.
At or before the effective date of such Common Stock Change Event, the Company and the resulting, surviving or transferee Person (if not the Company) of such Common Stock Change Event (the “Successor Person”) will execute and deliver such instruments or agreements that (x) provides for subsequent conversions of this Note in the manner set forth in this Section 7(I); (y) provides for subsequent adjustments to the Conversion Rate pursuant to Section 7(G) or Section 7(H) in a manner consistent with this Section 7(I); and (z) contains such other provisions as the Company reasonably determines are appropriate to preserve the economic interests of the Holder and to give effect to the provisions of this Section 7(I). If the Reference Property includes shares of stock or other securities or assets of a Person other than the Successor Person, then such other Person will also execute such instruments or agreements and such instruments or agreements will contain such additional provisions the Company reasonably determines are appropriate to preserve the economic interests of the Holder.
(i) Beneficial Ownership Limitation. Notwithstanding anything to the contrary contained herein, the Company shall not effect the conversion of any portion of this Note, or otherwise issue shares pursuant to this Note, and the Holder shall not have the right to convert any portion of this Note, pursuant to the terms and conditions of this Note and any such conversion or issuance shall be null and void and treated as if never made, to the extent that after giving effect to such conversion or issuance, the Holder together with the other Attribution Parties collectively would beneficially own in the aggregate in excess of 9.99% (the “Maximum Percentage”) of the number of shares of Common Stock outstanding immediately after giving effect to such conversion or issuance. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by the Holder and the other Attribution Parties shall include the number of shares of Common Stock held by the Holder and all other Attribution Parties plus the number of shares of Common Stock issuable upon conversion of, or otherwise pursuant to, this Note with respect to which the determination of such sentence is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (A) conversion of the remaining, unconverted portion of this Note beneficially owned by the Holder or any
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of the other Attribution Parties and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company (including, without limitation, any convertible notes or convertible preferred stock or warrants) beneficially owned by the Holder or any other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained in this Section 7(J)(i). For purposes of this Section 7(J)(i), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act. For purposes of this Note, in determining the number of outstanding shares of Common Stock the Holder may acquire in connection with this Note without exceeding the Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company's most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the Commission, as the case may be, (y) a more recent public announcement by the Company or (z) any other written notice by the Company or the Transfer Agent (as defined in the Securities Purchase Agreement) setting forth the number of shares of Common Stock outstanding (the “Reported Outstanding Share Number”). If the Company receives a notice from the Holder related to the conversion of this Note or any issuance of shares of Common Stock in connection with this Note at a time when the actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company shall promptly notify the Holder in writing of the number of shares of Common Stock then outstanding and, to the extent that such conversion or issuance of shares of Common Stock would otherwise cause the Holder’s beneficial ownership, as determined pursuant to this Section 7(J)(i), to exceed the Maximum Percentage, the Holder must notify the Company of a reduced number of shares of Common Stock to be issued pursuant to such notice. For any reason at any time, upon the written or oral request of the Holder, the Company shall within one (1) Trading Day confirm in writing or by electronic mail to the Holder the number of shares of Common Stock outstanding at the close of business on the prior Business Day. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Note, by the Holder and any other Attribution Party since the date as of which the Reported Outstanding Share Number was reported. In the event that the issuance of shares of Common Stock to the Holder upon conversion of, or otherwise pursuant to, this Note results in the Holder and the other Attribution Parties being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section 13(d) of the Exchange Act), the number of shares so issued by which the Holder's and the other Attribution Parties’ aggregate beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”) shall be deemed null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer the Excess Shares. Upon delivery of a written notice to the Company, the Holder may from time to time increase or decrease the Maximum Percentage to any other percentage not in excess of 9.99% as specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the sixty-first (61st) day after such notice is delivered to the Company and (ii) any such increase or decrease will apply only to the Holder and the other Attribution Parties and not to any Other Holder of Notes that is not an Attribution Party of the Holder. For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this Note in excess of the Maximum Percentage shall not be deemed to be beneficially owned
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by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the Exchange Act. No prior inability to convert this Note or receive shares pursuant to this Note pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of convertibility. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 7(J)(i) to the extent necessary to correct this paragraph or any portion of this paragraph which may be defective or inconsistent with the intended beneficial ownership limitation contained in this Section 7(J)(i) or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitation contained in this paragraph may not be waived and shall apply to a successor holder of this Note.
provided, however, that the Company need not preserve or keep in full force and effect any such rights (charter and statutory), license or franchise or existence of any of its Subsidiaries if the Board of Directors determines in good faith that (x) the preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries, taken as a whole; and (y) the loss thereof is not, individually or in the aggregate, materially adverse to the Holder.
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48
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The Company will not consolidate with or merge with or into, or (directly, or indirectly through one or more of its Subsidiaries) sell, lease or otherwise transfer, in one transaction or a series of transactions, all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole, to another Person, other than the Holder or any of its Affiliates (a “Business Combination Event”), unless:
At the effective time of any Business Combination Event, the Successor Corporation (if not the Company) will succeed to, and may exercise every right and power of, the Company under
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the Transaction Documents with the same effect as if such Successor Corporation had been named as the Company in the Transaction Documents, and, except in the case of a lease, the predecessor Company will be discharged from its obligations under this Note.
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53
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and, in each case under this Section 10(A)(xx), such order or decree remains unstayed and in effect for at least thirty (30) days; or
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All payments due under this Note shall rank pari passu in right of payment with all senior indebtedness of the Company and senior to any Subordinated Indebtedness in right of payment.
If the Holder of this Note claims that this Note has been mutilated, lost, destroyed or wrongfully taken, then the Company will issue, execute and deliver a replacement Note upon surrender to the Company of such mutilated Note, or upon delivery to the Company of evidence of such loss, destruction or wrongful taking reasonably satisfactory to the Company. In the case of a lost, destroyed or wrongfully taken Note, the Company may require the Holder to provide such security or an indemnity that is reasonably satisfactory to the Company to protect the Company from any loss that it may suffer if this Note is replaced.
Any notice or communication to the Company or Park Lane will be deemed to have been duly given if in writing and delivered in person or by first class mail (registered or certified, return receipt requested), electronic transmission (including e-mail) or other similar means of unsecured electronic communication or overnight air courier guaranteeing next day delivery, or to the other’s address, which initially is as follows:
Surf Air Mobility Inc.
[ ]
Attention: [ ]
Email address: [ ]
With copies to:
[ ]
The Company, by notice to the Holder, may designate additional or different addresses for subsequent notices or communications.
Any notice or communication to the Holder will be by e-mail to its e-mail address, which initially is as set forth in the Securities Purchase Agreement. The Holder, by notice to the
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Company, may designate additional or different addresses for subsequent notices or communications.
If a notice or communication is mailed in the manner provided above within the time prescribed, it will be deemed to have been duly given, whether or not the addressee receives it.
All agreements of the Company in this Note will bind its successors and will inure to the benefit of the Holder's successors and assigns. Notwithstanding the foregoing, the Holder shall not assign or transfer this Note, or any of the Holder’s rights hereunder, to any Person, other than to the Holder’s Affiliates, unless an Event of Default shall have occurred and be continuing, and any purported assignment or transfer in contravention of the foregoing shall be void and of no effect, and Park Lane is a third party beneficiary of the foregoing restrictions.
If any provision of this Note is invalid, illegal or unenforceable, then the validity, legality and enforceability of the remaining provisions of this Note will not in any way be affected or impaired thereby.
The headings of the Sections of this Note have been inserted for convenience of reference only, are not to be considered a part of this Note and will in no way modify or restrict any of the terms or provisions of this Note.
Other than Section 7(J)(i) and this Section 17, which may not be modified, amended or waived, this Note may not be amended or modified unless in writing by the Company and the Required Holders (and, in the case of any provision (x) of which Park Lane is an explicit third party beneficiary, or (y) which requires notice to, or provides for consent by, Park Lane, or (z) which directly relates to draws on, issuance or modification of, renewal or replacement of, or conformity with this Note of, the Closing Date Letter of Credit, in each case, by Park Lane), and no condition herein (express or implied) may be waived unless waived in writing by each party whom the condition is meant to benefit.
All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. The Company and each Holder hereby irrevocably submits to the exclusive jurisdiction of any U.S. Federal Court with applicable subject matter jurisdiction sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or under any of the other Transaction Documents or with any transaction contemplated
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hereby or thereby, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude any Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to such Holder or to enforce a judgment or other court ruling in favor of such Holder. EACH PARTY 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 UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.
The Company (A) agrees that any suit, action or proceeding against it arising out of or relating to this Note may be instituted in any U.S. Federal Court with applicable subject matter jurisdiction sitting in the City of New York, Borough of Manhattan; (B) waives, to the fullest extent permitted by applicable law, (i) any objection that it may now or hereafter have to the laying of venue of any such suit, action or proceeding; and (ii) any claim that it may now or hereafter have that any such suit, action or proceeding in such a court has been brought in an inconvenient forum; and (C) submits to the nonexclusive jurisdiction of such court in any such suit, action or proceeding.
The Company agrees to pay all costs and expenses of the Holder incurred as a result of enforcement of this Note and the collection of any amounts owed to the Holder hereunder (whether in cash, Common Stock or otherwise), including, without limitation, reasonable and documented attorneys’ fees and expenses.
The words “execution,” “signed,” “signature,” and words of similar import in the Note shall be deemed to include electronic or digital signatures or the keeping of records in electronic form, each of which shall be of the same effect, validity, and enforceability as manually executed signatures or a paper-based recordkeeping system, as the case may be, to the extent and as provided for under applicable law, including the Electronic Signatures in Global and National Commerce Act of 2000 (15 U.S.C. §§ 7001-7006), the Electronic Signatures and Records Act of 1999 (N.Y. State Tech. §§ 301-309), or any other similar state laws based on the Uniform Electronic Transactions Act.
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The Collateral Agent hereby covenants and agrees, for the express benefit of Park Lane (who shall be a third party beneficiary of this Section 22), that, (a) upon the written request of the Company or Park Lane from time to time (which requests shall not (x) be made more than three (3) times during the term of this Note and (y) be made more frequently than monthly), if the then-outstanding face amount of the Closing Date Letter of Credit shall exceed the L/C Availability then in effect, the Collateral Agent shall (i) duly and promptly instruct the issuer of the Closing Date Letter of Credit to reduce the outstanding face amount of the Closing Date Letter of Credit to an amount equal to the L/C Availability then in effect and (ii) perform such acts, and deliver such documents, as are reasonably required by the issuer of the Closing Date Letter of Credit in order to effect such reduction, including without limitation, delivering the original copies of the Closing Date Letter of Credit via express overnight mail to the issuer; provided that, as condition to delivering such original copies of the Closing Date Letter of Credit to the issuer, Park Lane shall have provided the Collateral Agent with cash collateral in the amount of the L/C Availability then in effect, which cash collateral shall be deposited in a Controlled Account satisfying the requirements of Section 8(J)(i) or furnished by another method reasonably satisfactory to the Collateral Agent, provided, further, that the Collateral Agent shall release such cash collateral promptly after the Closing Date Letter of Credit (as so modified) is in possession of the Collateral Agent and (b) unless an Event of Default shall have occurred and be continuing, it shall not assign the Closing Date Letter of Credit or any substitute Letter of Credit, or any of its rights thereunder as the beneficiary, to any Person other than to the Collateral Agent’s Affiliates.
* * *
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Exhibit A
Form of Holder Conversion Notice
SURF AIR MOBILITY INC.
Senior Secured Convertible Note due 2028
Subject to the terms of this Note, by executing and delivering this Holder Conversion Notice, the undersigned Holder of this Note directs the Company to convert the following Principal Amount of this Note: $ ,000 in accordance with the following details.
Delivery Instructions: (Insert, as applicable, DTC participant number for delivery of Common Stock through the book entry-facilities of DTC, or name in which shares of Common Stock are to be delivered).
Box A ☐ If the Note bears a restricted legend and unrestricted shares are to be delivered: The undersigned Holder certifies that it will sell the shares to be delivered pursuant to (1) an effective registration statement or (2) Rule 144 under the Securities Act.
Box B ☐ If restricted shares are to be delivered, the Holder certifies that it has made arrangements with the transfer agent to receive such shares in its name.
Shares of Common Stock to be delivered:
Accrued interest amount:
Account Number:
DTC Participant Number:
DTC Participant Name:
Date:
(Legal Name of Holder)
By:
Name:
Title:
2
Exhibit B
Form of Company Conversion Notice
SURF AIR MOBILITY INC.
Senior Secured Convertible Notes due 2028
By executing and delivering this Company Conversion Notice, the Company hereby notifies the Holder of the Note of the Company’s election to convert the entire principal amount of the Note identified by Certificate No. .
Delivery Instructions:
Box A ☐ Unrestricted shares are to be delivered.
Box B ☐ Restricted shares are to be delivered.
By delivering this Company Conversion Notice, the Company hereby represents and warrants that the Forced Conversion Equity Conditions have been satisfied as of the date hereof.
SURF AIR MOBILITY INC.
Date: By:
Name:
Title:
Exhibit C
Form of Covenant Compliance Certification
The undersigned, the duly qualified and elected Chief Financial Officer of SURF AIR MOBILITY INC., a Delaware corporation (the “Company”), does hereby certify in such capacity and on behalf of the Company, pursuant to the Senior Secured Convertible Note due 2028, issued November 12, 2025 (the “Note”), issued by the Company to [ ], that:
Capitalized terms used herein without definition shall have the meanings given to such terms in the Note.
SURF AIR MOBILITY INC.
|
By: |
Name: |
Title: |
Date: __________________
Exhibit 10.5
FIRST AMENDMENT TO REIMBURSEMENT AGREEMENT
FIRST AMENDMENT (this “Amendment”) dated as of November 12, 2025 (the “First Amendment Effective Date”), to that certain Reimbursement Agreement, dated as of November 14, 204 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time prior to the date hereof, the “Original Reimbursement Agreement” and the Original Reimbursement Agreement, as amended by this Amendment, the “Amended Reimbursement Agreement”), by and among, inter alios, Surf Air Mobility Inc., a Delaware corporation (the “Company”), the other Obligors party thereto from time to time and Park Lane Investments LLC, as procurer of certain credit support for the benefit of the Company (with its successors, the “Credit Provider”), by and among the Company, the Credit Provider and the other Obligors party hereto. Capitalized terms used but not defined herein are used as defined in the Amended Reimbursement Agreement.
RECITALS:
WHEREAS, the Company has requested, and the Credit Provider is willing to make, certain amendments to the provisions of the Original Reimbursement Agreement, as further set forth in the Amended Reimbursement Agreement.
NOW, THEREFORE, in consideration of the premises and agreements, provisions and covenants herein contained, the parties hereto agree as follows:
Section 1. Certain Amendments.
Section 2. Conditions to Effectiveness of Amendment. This Amendment shall become effective as of the First Amendment Effective Date when:
jurisdiction of organization of such Obligor, and (D) attach a good standing certificate (to the extent such concept exists) for each Obligor from its jurisdiction of organization;
Section 3. Representations and Warranties. By its execution of this Amendment, each Obligor hereby represents and warrants that:
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Amendment Effective Date with the same effect as though made on and as of such date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date; provided that, in each case, such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality or by a reference to a Material Adverse Effect in the text thereof; provided further that all references in the representations set forth in Article III of the Original Reimbursement Agreement to “Reimbursement Documents” shall be deemed to be references to this Amendment and the other Reimbursement Documents (including the Original Reimbursement Agreement) as amended by this Amendment; and
Section 4. Certain Acknowledgements.
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Section 5. Amendment, Modifications and Waiver. This Amendment may not be amended, modified or waived except in accordance with Section 7.1 of the Original Reimbursement Agreement.
Section 6. Miscellaneous.
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Transactions Act. The provisions of Section 7.7 of the Original Reimbursement Agreement are hereby incorporated by reference.
[Signature pages to follow]
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IN WITNESS WHEREOF, each of the undersigned has caused its duly authorized officer to execute and deliver this Amendment as of the date first written above.
COMPANY:
SURF AIR MOBILITY INC.
By: Name:
Title:
OTHER OBLIGORS:
[ ]
By: Name:
Title:
PARK LANE INVESTMENTS LLC,
as the Credit Provider
By: ____________________________
Name:
Title:
ANNEX I
Amended Reimbursement Agreement
[See attached.]
Execution Version Conformed for First Amendment, dated November 12, 2025
REIMBURSEMENT AGREEMENT
dated as of November 14, 2024 between
SURF AIR MOBILITY INC.,
as the Company,
the other Obligors party hereto, and
PARK LANE INVESTMENTS LLC,
as the Credit Provider
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS 1
Section 1.1 Definitions 1
Section 1.2 Terms Generally 5
ARTICLE II LETTERS OF CREDIT 6
Section 2.1 Letters of Credit 6
Section 2.2 Reimbursement and Indemnity 6
Section 2.3 Fees, Costs and Expenses 7
Section 2.4 Cash Deposit 7
Section 2.5 Payments and Computations 7
ARTICLE III REPRESENTATIONS AND WARRANTIES 8
Section 3.1 Representations and Warranties of the Company 8
ARTICLE IV GUARANTY 9
Section 4.1 Guaranty 9
Section 4.2 Guaranty Absolute 9
Section 4.3 Reinstatement 10
Section 4.4 Acceleration 10
Section 4.5 Reorganization 10
ARTICLE V COVENANTS 10
Section 5.1 Affirmative Covenants of the Company 10
Section 5.2 Negative Covenants of the Company 13
ARTICLE VI EVENTS OF DEFAULT; CASH DOMINION 15
Section 6.1 Events of Default 15
ARTICLE VII MISCELLANEOUS 16
Section 7.1 Amendments and Waivers 16
Section 7.2 Notices 16
Section 7.3 Set-off 17
Section 7.4 Successors and Assigns 17
Section 7.5 Costs, Expenses and Taxes 17
Section 7.6 Governing Law 18
Section 7.7 Counterparts; Effectiveness 18
SECTION 7.8 WAIVER OF JURY TRIAL 18
Section 7.9 Subordination 18
Section 7.10 Confidentiality 18
REIMBURSEMENT AGREEMENT, dated as of November 14, 2024 (the “Agreement”) by and among Surf Air Mobility Inc., a Delaware corporation (the “Company”), the Subsidiaries of the Company listed on Schedule I hereto, (collectively, together with the Company and any Additional Guarantors, the “Obligors”) and Park Lane Investments LLC, as procurer of certain credit support for the benefit of the Company (with its successors, the “Credit Provider”). The Obligors and the Credit Provider are sometimes referred to herein collectively as the “Parties” and individually as a “Party”.
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. For purposes of this Agreement, the following capitalized terms shall have the meanings set forth below.
“Account Control Agreement” shall mean a deposit account control agreement or securities account control agreement, as applicable, in form and substance satisfactory to the Credit Provider in its sole discretion executed by the applicable Obligor and the depositary or other financial institution maintaining a deposit account or securities account (in each case, other than an Excluded Account) for an Obligor, in favor of the Credit Provider and meeting the requirements set forth in Section 5.1(o).
“Affiliate” means, when used with respect to a specified person, another person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the person specified.
“Agreement” has the meaning provided for in the Preamble.
“Aircraft Related Assets” means aircraft, aircraft components, engines and related equipment and other assets.
“Aircraft Related Financing” means purchase money Debt or Debt consisting of finance leases the proceeds of which are used to finance the acquisition of Aircraft Related Assets.
“Business Day” means any day other than a Saturday, Sunday or other day on which banks in New York, New York are authorized or required by law to close.
“Cash Dominion Period” shall mean the period commencing upon the occurrence of a Liquidity Shortfall or an Event of Default, and ending when the aggregate amount of the Obligors’ unrestricted cash has exceeded $20,000,000 for 20 consecutive Business Days, and no Event of Default continues to exist.
“Change of Control” means any event, transaction, or occurrence as a result of which any “person” (as such term is defined in Sections 3(a)(9) and 13(d)(3) of the Exchange Act), other than (i) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or (ii) the Credit Provider or any Affiliate thereof, is or becomes a beneficial owner (within the meaning Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company, representing thirty-five percent (35%) or more of the combined voting power of the Company’s then outstanding securities in a single transaction or a series of related transactions.
“Code” means the Internal Revenue Code of 1986, as amended from time to time and the regulations promulgated and rulings issued thereunder.
“Collateral” means, collectively, all of the real, personal and mixed property in which liens are purported to be granted pursuant to the Reimbursement Documents as security for the Obligations.
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“Company” has the meaning provided in the Preamble.
“Comvest Credit Agreement” means that certain Credit Agreement, dated as of the date hereof, among the Company, CCP Agency, LLC, as agent, and the lenders parties thereto, as the same may be amended, restated, refinanced, replaced, supplemented or otherwise modified from time to time.
“Confidential Information” means information that any Obligor furnishes to the Credit Provider pursuant to any Reimbursement Document concerning the Obligors and their business, operations, assets and existing and contemplated business plans, but does not include any such information once such information has become, or if such information is, generally available to the public other than through a breach of the confidentiality provisions of this Agreement or other applicable confidentiality provisions.
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a person, whether through the ownership of voting securities, by contract or otherwise, and the terms “Controlling” and “Controlled” shall have meanings correlative thereto.
“Debt” of any Person means, without duplication, (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase price of property or services,
(c) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all obligations of such Person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (e) all obligations of such Person as lessee under leases that have been or should be, in accordance with GAAP, recorded as capital leases or finance leases, (f) all obligations, contingent or otherwise, of such Person in respect of acceptances, letters of credit or similar extensions of credit, (g) all obligations of such Person in respect of hedging arrangements, (h) all Debt of others referred to in clauses (a) through (g) above or clause (i) below guaranteed directly or indirectly in any manner by such Person, or in effect guaranteed directly or indirectly by such Person through an agreement (1) to pay or purchase such Debt or to advance or supply funds for the payment or purchase of such Debt, (2) to purchase, sell or lease (as lessee or lessor) property, or to purchase or sell services, primarily for the purpose of enabling the debtor to make payment of such Debt or to assure the holder of such Debt against loss, (3) to supply funds to or in any other manner invest in the debtor (including any agreement to pay for property or services irrespective of whether such property is received or such services are rendered) or (4) otherwise to assure a creditor against loss, and (i) all Debt referred to in clauses (a) through (h) above secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien on property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Debt.
“Default” means any event, occurrence or condition which is, or upon notice, lapse of time, or both, would constitute an Event of Default.
“Designated Facilities” means, collectively, (1) that certain Credit Agreement, dated as of even date herewith, among the Company, CCP Agency, LLC, as administrative agent and the lenders parties thereto from time to time,the High Trail Senior Note, (2) this Agreement, (3) that certain Secured Promissory Note, dated as of even date herewith, among the Company, the other Obligors, and LamVen LLC as lender, and (4) that certain Convertible Note Purchase Agreement, dated as of June 21, 2023 and amended as of even date herewith, among the Company, the other Obligors, and Partners For Growth V,
L.P. as lender., in each case as amended, modified, or replaced from time to time. For the avoidance of doubt, the Secured Promissory Note identified in clause (3) has been modified and assigned on and prior to the First Amendment Effective Date, and as of the First Amendment Effective Date comprises (x) that certain Secured Promissory Note, dated as of even date herewith (and thereafter modified), among the
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Company, the other Obligors, and LamVen LLC as lender, and (y) that certain Secured Promissory Note, dated as of even date herewith (and thereafter modified and assigned), among the Company, the other Obligors, and HT Investments MA LLC as lender.
“Dollars” or “$” or “USD” means the lawful money of the United States.
“Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.
“Event of Default” means each of the events specified in Section 6.1(a).
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to
time.
“Excluded Account” shall mean (i) any deposit account or securities account of any Obligor exclusively used for all or any of the following purposes: payroll, employee wages and benefits, withholding taxes or compliance with legal requirements, to the extent such legal requirements prohibit the granting of a Lien thereon, and (ii) deposit accounts of any Obligor with an average daily balance of unrestricted cash or cash equivalents in any month which does not exceed more than $10,000 at any time for any single account or $100,000 for all such accounts in the aggregate.
“Excluded Subsidiary” means any direct or indirect Subsidiary of the Company to the extent that such Subsidiary is prohibited from providing a guarantee in respect of the Guaranteed Obligations by restrictions in (i) applicable law, rule or regulation or which would require governmental authorization, unless such governmental authorization has been received or (ii) applicable Organizational Documents of such Subsidiary, or contractual obligations binding on such Subsidiaries, in each case as in effect on the date hereof and not entered into in contemplation of this Agreement.
“Financial Officer” of any Person means the chief executive officer, president, chief financial officer, any vice president, controller, assistant controller, treasurer or any assistant treasurer of such Person.
“First Amendment” means that certain First Amendment to Reimbursement Agreement, dated as of November 12, 2025, by and among the Company, the Obligors and Park Lane Investments LLC.
“First Amendment Effective Date” means November 12, 2025.
“GAAP” means U.S. generally accepted accounting principles, applied on a consistent
basis.
“GEM Equity Purchase Facility” means the Second Amended and Restated Share Purchase Agreement, dated as of February 8, 2023, by and among the purchasers and the Obligors party thereto.
“Governmental Authority” means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative,
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judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).
“High Trail Senior Note” means that certain Senior Secured Convertible Note due 2028, dated as of the First Amendment Effective Date, made by the Company in favor of High Trail Special Situations LLC, as the same may be amended, restated, refinanced, replaced, supplemented or otherwise modified from time to time.
“Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of equity interests or debt or other securities of another Person, (b) a loan, advance or capital contribution to, guarantee or assumption of Debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person or (c) the purchase or other acquisition (in one transaction or a series of transactions) of all or substantially all of the property and assets or business of another Person or assets constituting a business unit, line of business or division of such Person. For purposes of covenant compliance, the amount of any Investment at any time shall be the amount actually invested (measured at the time made), without adjustment for subsequent increases or decreases in the value of such Investment, less any returns in respect of such Investment (not to exceed the original amount invested).
“International Trade Laws” means all applicable (a) export controls, import controls and customs, antiboycott, and economic or financial sanctions laws and regulations of the United States, including, but not limited to, sanctions laws administered and enforced by the Office of Foreign Assets Control; the United States Export Administration Act of 1979, as amended, the Export Control Reform Act of 2018, and implementing Export Administration Regulations; the Arms Export Control Act and implementing International Traffic in Arms Regulations; the anti-boycott regulations, guidelines, and reporting requirements under the Export Administration Regulations and Section 999 of the Code; U.S. customs laws enforced by U.S. Customs and Border Protection; and other potentially applicable regulations administered by the U.S. Department of Energy, U.S. Department of Commerce, and U.S. Nuclear Regulatory Commission; and (b) and any similar Laws in any other jurisdiction in which the Company or any of its Subsidiaries, or their respective agents and representatives when acting on behalf of the Company or any of its Subsidiaries, conduct business.
“LC Disbursement” means a payment or disbursement made by the Credit Provider with respect to a Letter of Credit under any agreement between the Credit Provider (or its Affiliates) and the LC Issuer of any Letter of Credit.
“LC Issuer” means the issuer of any Letter of Credit, or any Affiliate thereof.
“Letter of Credit” means any letter of credit, procured or arranged by the Credit Provider, for which the beneficiary is (i) athe holder (at the time such letter of credit is procured, arranged or issued) of Debt of the Company or any Subsidiary thereof under the Comvest Credit AgreementSenior Facilities, or (ii) an Affiliate of any such holder described in the foregoing clause (i); including, without limitation, that certain Irrevocable Standby Documentary Credit No. SDCMTN585910 issued by HSBC BANK USA, N.A. in favor of CCP AGENCY, LLC, as the same may be renewed or, extended, assigned and/or amended from time to time. (including without limitation the amendments and assignment dated on or around the First Amendment Effective Date, pursuant to which, among other things, such letter of credit is being assigned to High Trail Special Situations LLC as beneficiary).
“Lien” means any lien, security interest or other charge or encumbrance of any kind, or any other type of preferential arrangement, including, without limitation, the lien or retained security title of a conditional vendor and any easement, right of way or other encumbrance on title to real property.
“Material Adverse Effect” means a material adverse effect on (a) the business, condition (financial or otherwise), operations, performance or properties of the Borrower or of the Obligors, taken as
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a whole, or (b) the ability of the Borrower or of the Obligors, taken as a whole, to perform its obligations under any Reimbursement Document to which it is a party.
“Material Debt” means any Debt with an aggregate principal amount in excess of
$500,000, which in any event shall exclude any Aircraft Related Financing.
“Obligations” means all obligations (including the Reimbursement Obligations), debts, principal, interest (including any interest that accrues after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), premiums, liabilities, obligations (including indemnification obligations), fees, charges, costs, expenses (including any portion thereof that accrues after the commencement of an Insolvency Proceeding, whether or not allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), guaranties, covenants, and duties of any kind and description incurred and outstanding by the Company, the other Obligors or any of its or their subsidiaries to the Credit Provider pursuant to or evidenced by the Reimbursement Documents, and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, and including all interest not paid when due and all expenses that the Company or any Obligor is required to pay or reimburse by the Reimbursement Documents, by law, or otherwise. Any reference in this Agreement or in the other Reimbursement Documents to the Obligations shall include all extensions, modifications, renewals, or alterations thereof, both prior and subsequent to any Insolvency Proceeding.
“Obligor” has the meaning provided for in the Preamble.
“Organizational Documents” means articles of incorporation and bylaws or other governing documents of any Person (and any amendments to the same).
“Parties” has the meaning provided in the Preamble. “Permitted Liens” means the following:
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“Person” means any natural person or any corporation, limited liability company, business trust, joint venture, joint stock company, trust, association, company, partnership, Governmental Authority or other entity.
“Preamble” means the introductory paragraph of this Agreement.
“Reimbursement Documents” means this Agreement, the Security Agreement, the Account Control Agreements and any other agreement, instrument, certificate or document entered into by the Company or any Subsidiary thereof in connection with the foregoing.
“Reimbursement Obligations” means the Company’s obligations under Section 2.2 to reimburse LC Disbursements.
“Related Parties” means, with respect to any Person, such Person’s Affiliates and the direct and indirect equityholders, partners, directors, officers, employees, agents, co-agents, sub-agents, consultants, attorneys, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.
“Requirements of Law” means, as to any person, collectively, any and all applicable requirements of any Governmental Authority including any and all laws, judgments, orders, executive orders, decrees, ordinances, rules, regulations, statutes or case law.
“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interest of the Company or any Subsidiary thereof, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation or termination of any such Equity Interest, or on account of any return of capital to the Company’s or any such Subsidiary’s stockholders, partners or members (or the equivalent Person thereof).
“Sanctioned Jurisdiction” means a country or territory that is, or since April 24, 2019, has been, the subject or target of comprehensive U.S. sanctions (as of the date of this Agreement, Cuba; Iran; North Korea; Syria; and the Crimea, so-called Donetsk People’s Republic, and so-called Luhansk People’s Republic regions of Ukraine).
“Sanctioned Person” means any Person that is the subject or target of sanctions or restrictions under International Trade Laws, including: (a) any Person identified on any applicable U.S. or non-U.S. sanctions- or export-related restricted party list, including but not limited to the Specially Designated Nationals and Blocked Persons List, Sectoral Sanctions Identifications List, and Foreign Sanctions Evaders List maintained by the U.S. Department of the Treasury’s Office of Foreign Assets Control; the Denied Persons, Unverified, or Entity Lists, maintained by the U.S. Department of Commerce’s Bureau of Industry and Security; the Debarred List or non-proliferation sanctions lists maintained by the U.S. State Department’s Directorate of Defense Trade Controls; the Consolidated List of Persons, Groups and Entities Subject to EU Financial Sanctions, maintained by the European Union; the Consolidated List of Assets Freeze Targets, maintained by His Majesty’s Treasury (U.K.); the United Nations Security Council Consolidated List, maintained by the UN Security Council Committee; or any other similar list maintained by any other Governmental Authority having jurisdiction over the Agreement; and (b) any Person that is, in the aggregate, fifty percent (50%) or greater owned, directly or indirectly, or otherwise controlled by a Person or Persons described in clause (a) so as to subject the Person to sanctions; or (c) any Person that is organized, resident, or located in a Sanctioned Jurisdiction.
“Security Agreement” means that certain Security Agreement, dated as of November 14, 2024, by and among, the Company, the other grantors party thereto from time to time, Park Lane Investments LLC, as secured party and Park Lane Investments LLC, as collateral agent, as amended and
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restated on the First Amendment Effective Date and as further amended, restated, amended and restated, modified or supplemented from time to time.
“Senior Facilities” means, collectively, the Comvest Credit Agreement and the High Trail
Senior Note.
“Subordination Agreement” means that certain Subordination and Intercreditor Agreement, dated as of November 14, 2024, by and among, CCP Agency, LLC, in its capacity as Tier 1 Agent (as defined therein), Park Lane Investments LLC, in its capacity as Tier 2 Agent (as defined therein), LamVen LLC, in its capacity as Tier 3 Agent (as defined therein), LamVen LLC, in its capacity as Tier 4 Agent (as defined therein) and Partners For Growth V, L.P, as amended and restated on the First Amendment Effective Date (joining High Trail Special Situations LLC as party thereto) and as further amended, restated, amended and restated, modified or supplemented from time to time.
“Subsidiary” means, with respect to any person, any corporation or other entity of which more than 50% of (i) the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether or not at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency) or (ii) other equity interest comparable to that described in the preceding clause (i) is at the time directly or indirectly owned by such person, by such person and one or more other Subsidiaries, or by one or more other Subsidiaries.
Section 1.2 Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any person shall be construed to include such person’s successors and assigns, (c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, and (e) any reference to any law or regulation herein shall refer to such law or regulation as amended, modified or supplemented from time to time. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time.
ARTICLE II
LETTERS OF CREDIT
Section 2.1 Letters of Credit
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LLP, counsel for the Obligors, in each case with respect to the Reimbursement Documents and the transactions contemplated thereby, and Company has requested that such opinionopinions be rendered.
Section 2.2 Reimbursement and Indemnity.
Section 2.3 Fees, Costs and Expenses. The Company agrees to pay to the Credit Provider the following fees and charges:
Section 2.4 Cash Deposit.
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Section 2.5 Payments and Computations.
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thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. This subsection shall not be construed to require the Credit Provider to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Company or any other person. Each party’s obligations under this subsection shall survive the assignment of rights by, or the replacement of, the Credit Provider, the termination, the expiration or cancellation of the Agreement and the repayment, satisfaction or discharge of all obligations under this Agreement, the Security Agreement or any other Reimbursement Document.
ARTICLE III REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties of the Company. The Company, and each of the other Obligors party hereto, represents and warrants to the Credit Provider, as of the date hereof and as of the First Amendment Effective Date, as follows:
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ARTICLE IV
GUARANTY
Section 4.1 Guaranty. Each Obligor hereby jointly and severally with the other Obligors guarantees (this “Guaranty”), as a primary obligor and not as a surety to Credit Provider and its permitted successors and assigns, the prompt payment in full when due (whether at stated maturity, by required prepayment, declaration, demand, by acceleration or otherwise) of the principal of and interest (including any interest, fees, costs or charges that would accrue but for the provisions of (i) Title 11 of the United States Code after any bankruptcy or insolvency petition under Title 11 of the United States Code and (ii) any other debtor relief laws) on, or other amount owing under, this Agreement or any other Reimbursement Document from time to time owing to Credit Provider by any Obligor, in each case strictly in accordance with the terms hereof and thereof (such obligations, including any future increases in the amount thereof, being herein collectively called the “Guaranteed Obligations”). The Obligors hereby jointly and severally agree that if the Company or the other Obligor(s) shall fail to pay in full when due (whether at stated maturity, by acceleration or otherwise) any of the Guaranteed Obligations, the Obligors will promptly pay the same in cash, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, by acceleration or otherwise) in accordance with the terms of such extension or renewal. The guarantee in this Article IV is a continuing guarantee of payment, and shall apply to all Guaranteed Obligations whenever arising.
Section 4.2 Guaranty Absolute. The obligations of the Obligors under Article IV shall constitute a guaranty of payment and to the fullest extent permitted by applicable law, are absolute, irrevocable and unconditional, joint and several, irrespective of the value, genuineness, validity, regularity or enforceability of the Guaranteed Obligations of the Company under this Agreement, or any other agreement or instrument referred to herein, or any substitution, release or exchange of any other guarantee of or security for any of the Guaranteed Obligations, and, irrespective of any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or Obligor (except for payment in full). Without limiting the generality of the foregoing, it is agreed that the occurrence of any one or more of the following shall not alter or impair the liability of the Obligors hereunder which shall remain absolute, irrevocable and unconditional under any and all circumstances as described above: (i) at any time or from time to time, without notice to the Obligors, to the extent permitted by law, the time for any performance of or compliance with any of the Guaranteed Obligations shall be extended, or such performance or compliance shall be waived; (ii) any of the acts mentioned in any of the provisions of this Agreement, or any other agreement or instrument referred to herein, shall be done or omitted; (iii) the maturity of any of the Guaranteed Obligations shall be accelerated, or any of the Guaranteed Obligations shall be amended in any respect, or any right under this Agreement or any other agreement or instrument referred to herein shall be amended or waived in any respect or any other guarantee of any of the Guaranteed Obligations or any security therefor shall be released or exchanged in whole or in part or otherwise dealt with; or (iv) the release of any other Obligor.
The Obligors hereby expressly waive (to the fullest extent permitted by law) diligence, presentment, demand of payment, protest and, to the extent permitted by law, all notices whatsoever, and any requirement that Credit Provider exhaust any right, power or remedy or proceed against the Company under this Agreement or any other agreement or instrument referred to herein, or against any other
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person under any other guarantee of any of the Guaranteed Obligations. The Obligors waive, to the extent permitted by law, any and all notice of the creation, renewal, extension, waiver, termination or accrual of any of the Guaranteed Obligations and notice of or proof of reliance by Credit Provider upon this Guaranty or acceptance of this Guaranty, and the Guaranteed Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred in reliance upon this Guaranty, and all dealings between the Company and Credit Provider shall likewise be conclusively presumed to have been had or consummated in reliance upon this Guaranty. This Guaranty shall be construed as a continuing, absolute, irrevocable and unconditional guarantee of payment without regard to any right of offset with respect to the Guaranteed Obligations at any time or from time to time held by Credit Provider, and the obligations and liabilities of the Obligors hereunder shall not be conditioned or contingent upon the pursuit by Credit Provider or any other person at any time of any right or remedy against the Company or against any other person which may be or become liable in respect of all or any part of the Guaranteed Obligations or against any collateral security or guarantee therefor or right of offset with respect thereto. This Guaranty shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon the Obligors and the successors and assigns thereof, and shall inure to the benefit of Credit Provider and its successors and assigns, notwithstanding that from time to time during the term of this Agreement there may be no Guaranteed Obligations outstanding.
Section 4.3 Reinstatement. The obligations of the Obligors under this Article IV shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of the Company or other Obligor in respect of the Guaranteed Obligations is rescinded or must be otherwise restored by any holder of any of the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise. Each Obligor hereby agrees that until the payment in full in cash and satisfaction in full of all Guaranteed Obligations it shall subordinate any claim and shall not exercise any right or remedy, direct or indirect, arising by reason of any performance by it of its guarantee in Article IV, whether by subrogation, contribution or otherwise, against the Company or any other Obligor of any of the Guaranteed Obligations or any security for any of the Guaranteed Obligations.
Section 4.4 Acceleration. The Obligors jointly and severally agree that, as between the Obligors and Credit Provider, the obligations of the Obligors under this Agreement may be declared to be forthwith due and payable (or become automatically due and payable) as provided therein for purposes of Article IV, notwithstanding any stay, injunction or other prohibition preventing such declaration (or such obligations from becoming automatically due and payable) as against the Obligors and that, in the event of such declaration (or such obligations being deemed to have become automatically due and payable), such obligations (whether or not due and payable by the Company) shall forthwith become due and payable by the Obligors for purposes of Article IV.
Section 4.5 Reorganization. In any action or proceeding involving any state corporate limited partnership or limited liability company law, or any applicable state, federal or foreign bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of any Obligor under Article IV would otherwise be held or determined to be void, voidable, invalid or unenforceable, or subordinated to the claims of any other creditors, on account of the amount of its liability under Article IV, then, notwithstanding any other provision to the contrary, the amount of such liability shall, without any further action by such Obligor or any other Person, be automatically limited and reduced to the highest amount (after giving effect to the liability under this Guaranty, but before giving effect to any other guarantee) that is valid and enforceable and not subordinated to the claims of other creditors as determined in such action or proceeding.
ARTICLE V
COVENANTS
Section 5.1 Affirmative Covenants of the Company. The Company covenants and agrees that, until the latest to occur of the full payment and performance of all Obligations hereunder (other than contingent indemnity obligations), the expiry or termination of all Letters of Credit, and the payment of all amounts payable hereunder, unless otherwise consented to in writing (which may be in email form) by the Credit Provider, it will, and will cause each other Obligor to:
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(iii) guaranteeing any debt obligations of the Company having an aggregate principal amount in excess of
$500,000 (for the avoidance of doubt, whether or not such subsidiary is an Excluded Subsidiary), no later than the date such guarantee of such debt obligation becomes effective (or, if later, no later than the date hereof), in each case, shall become party hereto as an Obligor by a joinder agreement in form and substance satisfactory to the Credit Provider (such subsidiaries becoming parties hereto, together with the Initial Additional Guarantors, collectively the “Additional Guarantors”), and shall be bound by the provisions hereof applicable to the Obligors (including, without limitation, Article IV). An Additional Guarantor that subsequently becomes an Excluded Subsidiary shall not thereby be released from its obligations hereunder.
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information about the Company and its Subsidiaries to the holders of any such Debt (or to any representative thereof), a copy of each such statement, report or other written information, in each case other than such statement, report or other written information of a type that the Credit Provider has notified the Company in writing that it does not wish to receive;
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in a manner that would not so result in loss of privilege or pose a conflict of interest. The Non-Voting Observer shall be subject to the confidentiality obligations set forth in Section 7.10.
Section 5.2 Negative Covenants of the Company. The Company covenants and agrees that, until the latest to occur of the full payment and performance of all Obligations hereunder (other than contingent indemnity obligations), the expiry or termination of all Letters of Credit, and the payment of all amounts payable hereunder, unless otherwise consented to in writing (which may be in email form) by the Credit Provider, it will not, and will cause each other Obligor not to:
1 NTD: Orrick/Company to list factoring facility and other relevant debt.
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(2) Amend, modify or change any term or condition of any documentation governing any Junior Debt in a manner that would (i) permit a payment not otherwise permitted by Section 5.2(g)(1), (ii) contravene any subordination or intercreditor provisions then in effect or (iii) otherwise be materially adverse to the interests of Credit Provider.
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ARTICLE VI
EVENTS OF DEFAULT; CASH DOMINION
Section 6.1 Events of Default(a) . (a) The following events which shall occur and be continuing shall be Events of Default hereunder:
when required; or
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ARTICLE VII MISCELLANEOUS
Section 7.1 Amendments and Waivers. No failure or delay on the part of the Credit Provider in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power preclude any other or further exercise thereof or the exercise of any other right or power hereunder. No amendment or waiver of any provision of this Agreement or any other Reimbursement Document nor consent to any departure by the Company herefrom or therefrom (except as expressly provided for herein) shall in any event be effective unless the same shall be in writing and
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signed by the Credit Provider and the Company, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided that notwithstanding anything herein to the contrary, any amendment to this Section 7.1, Section 7.9 or Section 7.12 hereof shall also require the written consent of the Holder of the High Trail Senior Note. No notice to or demand on the Company in any case shall, of itself, entitle the Company to any other or further notice or demand in similar or other circumstances.
Section 7.2 Notices. Any communication, demand, or notice to be given hereunder will be duly given and deemed to have been received when actually delivered (or 72 hours after having been deposited in the mails with first class postage prepaid) to such party at the address specified below (or at such other address as such party shall specify to the other parties in writing) including delivery by any telecommunication device capable of transmitting or creating a written record or electronic mail.
The Credit Provider may (but shall not be required to) accept and act upon oral, telephonic, faxed or other forms of notices or instructions hereunder that such Party believes in good faith to have been given by a person authorized to do so on behalf of the Company. The Credit Provider shall be fully protected and held harmless by the Company, and shall have no liability for, acting on any such notice or instruction that such Party believes in good faith to have been given by a person authorized to do so on behalf of the Company.
Section 7.3 Set-off. If an Event of Default shall have occurred and be continuing and the Credit Provider shall have declared the obligations due and payable hereunder, the Credit Provider is hereby authorized to set-off against any amounts standing to the credit of, or obligations owed to, the Company or any other Obligor by the Creditor Provider or any of its Affiliates.
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Section 7.4 Successors and Assigns. This Agreement and each other Reimbursement Document shall inure to the benefit of, and shall be enforceable by, the Credit Provider and its respective successors and assigns. The Credit Provider may assign, or transfer by participation, any of its rights and/or obligations hereunder, in whole or in part, to any other office or affiliate of the Credit Provider or to any third party. If an assignment results in more than one person or entity having rights as Credit ProviderrProvider hereunder, then the Obligors and Credit Provider shall enter into appropriate modifications, as requested by Credit Provider in its reasonable discretion, to this Agreement to provide for multiple Credit Providers in respect of collective actions, voting, exercise of remedies and other applicable provisions. No Obligor may assign or otherwise transfer any of its rights or obligations under this Agreement or any other Reimbursement Document without the prior written consent of the Credit Provider in its sole discretion, and any purported assignment without such consent shall be void. The Credit Provider shall maintain, as a non-fiduciary agent of the Obligors, at one of its offices in the United States a register (the “Register”) for the recordation of the names and addresses of the Credit Provider, the principal amount and stated interest of the Obligations owing to, the Credit Provider pursuant to the terms hereof. Subject to receipt of any required tax forms reasonably required by the Company, the Credit Provider shall record the applicable transfers, assignments and assumptions in the Register. The entries in such Register shall be conclusive absent manifest error, and each Obligor and the Credit Provider shall treat the Credit Provider whose name is recorded therein pursuant to the terms hereof as the Credit Provider hereunder for all purposes of this Agreement, notwithstanding notice to the contrary, and no assignment shall be effective for any purpose under the Reimbursement Documents unless and until recorded in the Register. The Register shall be available for inspection by each Obligor and the Credit Provider, at any reasonable time upon reasonable prior written notice to the Credit Provider. The requirement for the Register set forth in this Section 7.4 shall be construed so that the Reimbursement Obligations and/or other interests hereunder are at all times maintained in “registered form” within the meaning of Treasury Regulation Sections 5f.103-1(c) and 1.871-14.
Section 7.5 Costs, Expenses and Taxes. The Company agrees to pay all reasonable and documented out of pocket costs and expenses of the Credit Provider, including reasonable fees and expenses of counsel, in connection with the preparation, negotiation, execution, delivery and administration, as applicable, of this Agreement, each other Reimbursement Document and each Letter of Credit or any amendments, modifications or waivers of the provisions hereof or thereof, the enforcement against any Obligor of this Agreement, the Security Agreement or any other Reimbursement Document and the protection of the rights of the Credit Provider hereunder and thereunder, including any bankruptcy, insolvency, enforcement proceedings or restructuring with respect to the Company. In addition, the Company shall pay any and all present or future stamp, court or documentary, intangible, recording, filing and other taxes and fees payable or determined to be payable in connection with any payment made under, the execution, delivery, performance, enforcement, registration, filing, or recording of, from the receipt or perfection of a security interest under, or otherwise with respect to, this this Agreement, the Security Agreement or any other Reimbursement Document, and agrees to indemnify and save the Credit Provider harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay such taxes and fees.
Section 7.6 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES). Each of the Obligors and the Credit Provider hereby irrevocably submits to the non-exclusive jurisdiction of any U.S. federal or state court in the State of New York for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Agreement, any other Reimbursement Document or the Letter of Credit. Each of the Obligors and the Credit Provider hereby consents to the laying of venue in any such suit, action or proceeding in New York County, New York, and hereby irrevocably waives any claim that any such suit, action or proceeding brought in such a court has been brought in an inconvenient forum. Any process in any such action shall be duly served if mailed by registered mail, postage prepaid, to the Company (or other applicable Obligor) or the Credit Provider at its address designated pursuant to Section 7.2.
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Section 7.7 Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if all signatures thereon were upon the same instrument. This Agreement shall become effective when it shall have been executed by the Credit Provider and when the Credit Provider shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by telecopier shall be effective as delivery of a manually executed counterpart of this Agreement.
Section 7.8 WAIVER OF JURY TRIAL. EACH OBLIGOR AND THE CREDIT PROVIDER HEREBY IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATING TO THIS AGREEMENT, ANY OTHER REIMBURSEMENT DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Section 7.9 Subordination. This Agreement is subject to the Subordination Agreement, and in case of any conflict between the terms hereof and the terms of the Subordination Agreement, the terms of the Subordination Agreement shall control.
Section 7.10 Confidentiality. The Credit Provider agrees that Confidential Information shall be treated by the Credit Provider in a confidential manner, used only in compliance with applicable law, including United States federal or state securities laws, and shall not be disclosed by Credit Provider to Persons who are not parties to this Agreement, except: (a) to the extent required by applicable law, statute, rule, regulation or judicial process or in connection with the exercise of any right or remedy under any Reimbursement Document, or as may be required in connection with the examination, audit or similar investigation of or by the Credit Provider or any of its Affiliates, (b) to examiners, auditors, accountants or any regulatory authority, (c) to Related Parties of the Credit Provider or any of its Affiliates, provided that such Persons to whom such disclosure is made will be informed of the confidential nature of such information and instructed to keep such information confidential, (d) in connection with any litigation or dispute which relates to this Agreement or any other Reimbursement Document to which the Credit Provider is a party or is otherwise subject or in connection with the exercise or enforcement of any right or remedy under any Reimbursement Document by the Credit Provider, or the disclosure of the tax structure or tax treatment of the transactions contemplated hereby, (e) to any permitted assignee (or permitted prospective assignee) of the Credit Provider which agrees in writing to be bound by this Section 7.10, and
(f) to any lender or other funding source of the Credit Provider provided that such Persons to whom such disclosure is made will be informed of the confidential nature of such information and instructed to keep such information confidential (each reference to the Credit Provider in the foregoing clauses shall be deemed to include (i) the actual and prospective assignees referred to in clause (e) above and the lenders and other funding sources referred to in clause (f) above, as applicable for purposes of this Section 7.10); provided further, that in no event shall the Credit Provider be obligated or required to return any materials furnished by or on behalf of the Company.
Section 7.11 Release. FOR AND IN CONSIDERATION OF PARK LANE INVESTMENTS LLC’S AGREEMENTS CONTAINED HEREIN, THE COMPANY AND EACH OTHER OBLIGOR, TOGETHER WITH THEIR SUCCESSORS AND ASSIGNS (INDIVIDUALLY AND COLLECTIVELY, “RELEASORS”) HEREBY VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER WAIVES AND DISCHARGES PARK LANE INVESTMENTS LLC AND EACH OF ITS RESPECTIVE PARENTS, DIVISIONS, SUBSIDIARIES, AFFILIATES (INCLUDING WITHOUT LIMITATION LIAM FAYED), MEMBERS, MANAGERS, PARTICIPANTS, PREDECESSORS, SUCCESSORS, AND ASSIGNS, AND EACH OF THEIR RESPECTIVE CURRENT AND FORMER DIRECTORS, OFFICERS, SHAREHOLDERS, MEMBERS, MANAGERS, PARTNERS, AGENTS, AND EMPLOYEES, AND EACH OF THEIR RESPECTIVE PREDECESSORS, SUCCESSORS, HEIRS, AND ASSIGNS (INDIVIDUALLY AND COLLECTIVELY, THE “RELEASED PARTIES”) FROM ALL POSSIBLE CLAIMS, COUNTERCLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES AND LIABILITIES WHATSOEVER, WHETHER KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT OR CONDITIONAL, OR AT LAW OR IN EQUITY, IN ANY CASE ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE
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DATE HEREOF THAT ANY OF THE RELEASORS MAY NOW OR HEREAFTER HAVE AGAINST THE RELEASED PARTIES, IF ANY, IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, INCLUDING WITHOUT LIMITATION ARISING DIRECTLY OR INDIRECTLY FROM ANY PRIOR OR EXISTING TRANSACTIONS BETWEEN RELEASORS AND RELEASED PARTIES, ANY OF THE REIMBURSEMENT DOCUMENTS, OR THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER ANY OF THE REIMBURSEMENT DOCUMENTS. EACH OF THE RELEASORS WAIVES THE BENEFITS OF ANY LAW INCLUDING SECTION 1542 OF THE CALIFORNIA CIVIL CODE, WHICH PROVIDES IN SUBSTANCE: “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, AND THAT, IF KNOWN BY HIM OR HER WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.” EACH OF THE RELEASORS UNDERSTANDS THAT THE FACTS WHICH IT BELIEVES TO BE TRUE AT THE TIME OF MAKING THE RELEASE PROVIDED FOR HEREIN MAY LATER TURN OUT TO BE DIFFERENT THAN IT NOW BELIEVES, AND THAT INFORMATION WHICH IS NOT NOW KNOWN OR SUSPECTED MAY LATER BE DISCOVERED. EACH OF THE RELEASORS ACCEPTS THIS POSSIBILITY, AND EACH OF THEM ASSUMES THE RISK OF THE FACTS TURNING OUT TO BE DIFFERENT AND NEW INFORMATION BEING DISCOVERED; AND EACH OF THEM FURTHER AGREES THAT THE RELEASE PROVIDED FOR HEREIN SHALL IN ALL RESPECTS CONTINUE TO BE EFFECTIVE AND NOT SUBJECT TO TERMINATION OR RESCISSION BECAUSE OF ANY DIFFERENCE IN SUCH FACTS OR ANY NEW INFORMATION.
Section 7.12 Senior Debt. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, EACH OF THE COMPANY, EACH OTHER OBLIGOR AND THE CREDIT PROVIDER AGREE THAT NO OBLIGATIONS OR COVENANTS OF THE COMPANY AND THE OTHER OBLIGORS HEREUNDER SHALL BE APPLICABLE (OTHER THAN THE OBLIGATIONS UNDER SECTIONS 2.3(a), 5.1(d), (h), (i) AND (l), AND 5.2(a), (b), (f), (h), (j) AND (k) AND ARTICLES IV AND VII HEREOF), AND THE CREDIT PROVIDER SHALL NOT ENFORCE ANY OF ITS RIGHTS OR REMEDIES HEREUNDER (OTHER THAN THE RIGHTS AND REMEDIES UNDER SECTION 6.1(b)(A) HEREOF, IN EACH CASE,
(X) SO LONG AS AN EVENT OF DEFAULT EXISTS UNDER THE HIGH TRAIL SENIOR NOTE AND (Y) SUBJECT TO THE SUBORDINATION AGREEMENT), IN EACH CASE, UNTIL (I) THE REPAYMENT IN FULL OF ALL INDEBTEDNESS OWED BY THE COMPANY AND THE OTHER OBLIGORS PURSUANT TO THE TERMS OF THE HIGH TRAIL SENIOR NOTE OR (II) THE WRITTEN CONSENT OF THE HOLDER OF THE HIGH TRAIL SENIOR NOTE. EACH OF THE PARTIES HERETO ACKNOWLEDGE AND AGREE THAT THE HOLDER OF THE HIGH TRAIL SENIOR NOTE IS A THIRD-PARTY BENEFICIARY OF THIS SECTION 7.12 AND (x) THIS SECTION 7.12 SHALL NOT BE MODIFIED WITHOUT THE PRIOR WRITTEN CONSENT OF THE HOLDER OF THE HIGH TRAIL SENIOR NOTE AND (y) NO OTHER PROVISIONS OF THIS AGREEMENT MAY BE MODIFIED IN ANY MANNER THAT WOULD HAVE THE EFFECT OF MODIFYING THE TERMS OF THIS SECTION 7.12 WITHOUT THE PRIOR WRITTEN CONSENT OF THE HOLDER OF THE HIGH TRAIL SENIOR NOTE.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first above written.
[SURF AIR MOBILITY INC.]
By:
Name:
Title:
Filing Office: Department of State of the State of Delaware
[SURF AIR GLOBAL LIMITED]
By:
Name:
Title:
Filing Office: District of Columbia Office of the Recorder of Deeds
[PARK LANE INVESTMENTS LLC]
By:
Name:
Title:
ANNEX II
Schedule 5.2(b)
[See attached.]
Schedule 5.2(b)
None.