Form 8-K
8-K — FARADAY FUTURE INTELLIGENT ELECTRIC INC.
Accession: 0001213900-26-044633
Filed: 2026-04-16
Period: 2026-04-10
CIK: 0001805521
SIC: 3711 (MOTOR VEHICLES & PASSENGER CAR BODIES)
Item: Entry into a Material Definitive Agreement
Item: Unregistered Sales of Equity Securities
Item: Material Modifications to Rights of Security Holders
Item: Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
Item: Other Events
Item: Financial Statements and Exhibits
Documents
8-K — ea0286579-8k_faraday.htm (Primary)
EX-3.1 — FORM OF CERTIFICATE OF DESIGNATION OF PREFERENCES, RIGHTS AND LIMITATIONS OF SERIES C CONVERTIBLE PREFERRED STOCK (ea028657901ex3-1.htm)
EX-4.1 — FORM OF WARRANT (ea028657901ex4-1.htm)
EX-10.1 — AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT, DATED APRIL 14, 2026, BY AND BETWEEN FARADAY FUTURE INTELLIGENT ELECTRIC INC. AND THE INVESTOR (ea028657901ex10-1.htm)
EX-10.2 — LOAN AGREEMENT DATED APRIL 10, 2026, BY AND BETWEEN FARADAY FUTURE INTELLIGENT ELECTRIC INC. AND THE INVESTOR (ea028657901ex10-2.htm)
EX-99.1 — PRESS RELEASE DATED APRIL 15, 2026 (ea028657901ex99-1.htm)
XML — IDEA: XBRL DOCUMENT (R1.htm)
8-K — CURRENT REPORT
8-K (Primary)
Filename: ea0286579-8k_faraday.htm · Sequence: 1
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2026-04-10
2026-04-10
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FFAI:RedeemableWarrantsExercisableForSharesOfClassCommonStockAtExercisePriceOf110400.00PerShareMember
2026-04-10
2026-04-10
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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): April 10, 2026
Faraday Future Intelligent Electric Inc.
(Exact
name of registrant as specified in its charter)
Delaware
001-39395
84-4720320
(State
or other jurisdiction
of incorporation)
(Commission
File Number)
(I.R.S.
Employer
Identification No.)
1990 E. Grand Avenue
El Segundo, CA
90245
(Address
of principal executive offices)
(Zip
Code)
(424)
276-7616
(Registrant’s
telephone number, including area code)
Not
Applicable
(Former
name or former address, if changed since last report)
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:
☐
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class
Trading
Symbol(s)
Name
of each exchange on which registered
Class A common stock, par value $0.0001 per share
FFAI
The
Nasdaq Stock Market LLC
Redeemable warrants, exercisable for shares of Class A common stock at an exercise price of $110,400.00 per share
FFAIW
The
Nasdaq Stock Market LLC
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
1.01 Entry into a Material Definitive Agreement.
Loan
Agreement
On
April 10, 2026, Faraday Future Intelligent Electric Inc. (the “Company”) entered into a loan agreement (the “Loan Agreement”)
an accredited investor (the “Investor”), pursuant to which, the Company borrowed, and the Investor lent the Company an aggregate
of $2,000,000 with the interest accruing at a rate of 10% per annum (the “Loan Amount”). The Loan Amount on the day that
is immediately prior to the 1 year anniversary of the date on which the Loan Amount was paid to the Company. The Loan Agreement also
provides the Investor the right to convert all or part of its Loan Amount into the Subscription Amount (as defined below) pursuant to
the Purchase Agreement (as defined below).
The
foregoing summary of the Loan Agreement does not purport to be complete and is subject to, and is qualified in their entirety by, the
full text of the form of the Loan Agreement, which is filed as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated herein
by reference.
Amended
and Restated Securities Purchase Agreement
As
previously disclosed in the Current Report on Form 8-K filed with the Securities and Exchange Commission on February 5, 2026 (the “Original
Report”), on February 4, 2026, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”)
with the Investor, pursuant to which the Company agreed to sell, and the Investor agreed to purchase, $10 million (the “Subscription
Amount”) of Class A common stock, par value $0.0001 per share of the Company (the “Class A Common Stock”) at a per
share price equal to 100% of the closing price of Class A Common Stock (such per share price, the “Initial Price”) immediately
prior to the closing date (the “Closing Date”). Pursuant to the Purchase Agreement, the Company agreed to issue certain True-Up
Shares to the Investor in the event of a Dilutive Issuance (a “True-Up Issuance”). The Original Report is incorporated herein
by reference. Capitalized terms not defined herein shall have the meaning set forth in the Original Report.
On
April 14, 2026 (the “Signing Date”), the Company and the Investor entered into an Amended and Restated Securities Purchase
Agreement (the “A&R Purchase Agreement”, and collectively with Purchase Agreement, the “SPA”). Pursuant to
the SPA, the Subscription Amount was increased to $12 million, $500,000 of which will be used to purchase shares of Class A Common Stock
(the “Common Shares”) and $11.5 million of which will be used to be purchase a to-be-designated series of the Company’s
convertible preferred stock, par value $0.0001 per share (the “Convertible Preferred Stock”, and together with the Common
Shares, the “Subject Shares”). The Initial Price was revised to $0.26, which is 100% of the average closing price of the
Company’s Class A Common Stock on Nasdaq for the ten (10) Trading Day period immediately prior to the Signing Date (the “Amended
Price”). In addition, the Company’s obligation to issue, and the Investor’s right to receive, True-Up Shares was eliminated
in its entirety, in consideration of which, the Company agreed to issue at the closing of the transaction contemplated by the SPA a common
stock purchase warrant (the “Warrant” and collectively with the Subject Shares, the “Securities”), exercisable
for an aggregate of 1,000,000 shares of Class A Common Stock.
Warrant
The
Warrant will have a term of four years from the Closing Date and is exercisable immediately after completion of delivery of the 500th
FX Super One vehicle to customers by the Company, at an exercise price of $1.50 per share.
Exercise
Limitations
The
Investor will not have the right to exercise any portion of the Warrant to the extent that, after giving effect to such exercise, the
Investor (together with certain related parties) would beneficially own in excess of 9.99% of total number of shares of Common Stock
outstanding immediately after giving effect to such exercise.
1
At
any time before the Company obtains stockholder approval in connection with the transaction contemplated under the SPA, or the financial
viability exception pursuant to Nasdaq Rule 5635(d) for the issuance of the Securities under the SPA, then the Company may not issue
upon exercise of this Warrant a number of shares of Class A Common Stock (the “Warrant Shares”), which, when aggregated with
the Subject Shares issued pursuant to the SPA, and the Conversion Shares (as defined below) issued upon conversion of the Convertible
Preferred Stock, if any, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations, exceed the
19.99% of the total outstanding Class A Common Stock of the Company as of the date of the Purchase Agreement.
Series
C Convertible Preferred Stock
On
April 15, 2026, the Company filed with the Secretary of State of the State of Delaware (the “Delaware Secretary of State”)
a Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock (the “Certificate of
Designation”) to designate 11,502 shares of the Company’s authorized and unissued preferred stock as Convertible Preferred
Stock prior to the Closing Date. The Certificate of Designation will become effective upon its filing with the Delaware Secretary of
State and establishes the rights, preferences, privileges, qualifications, restrictions, and limitations relating to the Convertible
Preferred Stock as summarized below.
Convertibility
The
Convertible Preferred Stock will be convertible immediately after the issuance. The number of shares of Class A Common Stock issuable
upon conversion of each Convertible Preferred Stock shall be determined by dividing (x) the Stated Value of $1,000 of such Convertible
Preferred Stock by (y) the Conversion Price, which is equal to the Amended Price (the “Conversion Formula”), subject to certain
adjustments set forth in the Certificate of Designation.
Alternate
Conversion
At
any time, at the option of the Purchaser, the Purchaser may voluntarily convert all or part of the Convertible Preferred Stock at the
price equal to the lower of (i) the applicable Conversion Price then in effect and (ii) the greater of (A) $0.13, and (B) 100% of the
closing price of the Class A Common Stock of the trading day immediately preceding the delivery of applicable Conversion Notice (the
“Alternative Conversion Price”), indicating that the Purchase elects to convert all of part of the Convertible Preferred
Stock by way of an alternate conversion (the “Alternate Conversion”).
The
number of shares of Class A Common Stock issuable upon an Alternate Conversion shall be determined by dividing (x) the Stated Value of
$1,000 of such Convertible Preferred Stock by (y) the Alternative Conversion Price.
Conversion
Limitations
At
any time before the Company obtains stockholder approval in connection with the transaction contemplated under the SPA, or the financial
viability exception pursuant to Nasdaq Rule 5635(d) for the issuance of the Securities under the SPA, then the Company may not issue
upon conversion of such shares of Convertible Preferred Stock a number of shares of Class A Common Stock (the “Conversion Shares”),
which, when aggregated with the Subject Shares issued pursuant to the SPA and the Warrant Shares issued upon exercise of the Warrant,
if any, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations, exceed the 19.99% of the total
outstanding Class A Common Stock of the Company as of the date of the Purchase Agreement.
2
Voting
Holders
of shares of Convertible Preferred Stock are entitled to vote with the holders of outstanding shares of Class A Common Stock, voting
together as a single class, with respect to any and all matters presented to the shareholders of the Company for their action or consideration
(whether at a meeting or shareholders of the Company, by written action of shareholders in lieu of a meeting or otherwise). In any such
vote, each share of Convertible Preferred Stock will be entitled to a number of votes equal to the lesser of (a) the number of shares
of Class A Common Stock into which such shares of Convertible Preferred Stock are convertible as of the record date for such vote or
written consent or, if there is no specified record date, as of the date of such vote or written consent and (b) 19.99% of the shares
of the Company’s Class A Common Stock outstanding immediately after giving effect to such a conversion.
The
foregoing summaries of the A&R Purchase Agreement, the Warrant and the Certificate of Designation do not purport to be complete and
are subject to, and are qualified in their entirety by, the full text of the form of the A&R Purchase Agreement, the Warrant and
the Certificate of Designation, which are filed as Exhibits 10.1, 4.1 and 3.1, respectively, to this Current Report on Form 8-K and are
incorporated herein by reference.
Item
3.02 Unregistered Sales of Equity Securities.
The
disclosure included in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item
3.03 Material Modification to Rights of Security Holders.
The
disclosure included in Item 1.01 related to the Certificate of Designation is incorporated into this Item 3.03 by reference.
Item
5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
The
disclosure included in Item 1.01 related to the Certificate of Designation is incorporated into this Item 5.03 by reference.
Item
8.01 Other Events.
On
April 15, 2026, the Company issued a press release announcing the signing of the A&R Purchase Agreement. The information contained
in this Current Report on Form 8-K, including Exhibit 99.1 hereto, is being furnished and shall not be deemed “filed” for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the
liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended,
or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item
9.01. Financial Statements and Exhibits
(d)
Exhibits.
Exhibit
No.
Description
3.1
Form of Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock
4.1
Form
of Warrant
10.1
Amended and Restated Securities Purchase Agreement, dated April 14, 2026, by and between Faraday Future Intelligent Electric Inc. and the Investor.
10.2
Loan Agreement dated April 10, 2026, by and between Faraday Future Intelligent Electric Inc. and the Investor.
99.1
Press
Release dated April 15, 2026
104
Cover
Page Interactive Data File (embedded within the Inline XBRL document)
3
SIGNATURE
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.
FARADAY
FUTURE INTELLIGENT ELECTRIC INC.
Date:
April 16, 2026
By:
/s/
Koti Meka
Name:
Koti
Meka
Title:
Chief
Financial Officer
4
EX-3.1 — FORM OF CERTIFICATE OF DESIGNATION OF PREFERENCES, RIGHTS AND LIMITATIONS OF SERIES C CONVERTIBLE PREFERRED STOCK
EX-3.1
Filename: ea028657901ex3-1.htm · Sequence: 2
Exhibit
3.1
Faraday
Future Intelligent Electric Inc.
Certificate
of Designation
of
Preferences,
Rights and Limitations of
Series
C Convertible Preferred Stock
Pursuant
to Sections 151 of the
General
Corporation Law of the State of Delaware
Faraday
Future Intelligent Electric Inc., a Delaware corporation
(the “Company”), hereby certifies that the following recitals and resolution were duly adopted by the board of directors
of the Company (the “Board”), in accordance with the provisions of Sections 151 of the General Corporation Law of
the State of Delaware, as amended (the “DGCL”), on April 15, 2026, which resolution provides for the creation of a
series of the Company’s preferred stock, par value $0.0001 per share, which is designated as “Series C Convertible Preferred
Stock,” with the rights, preferences, privileges and restrictions set forth therein.
WHEREAS,
the Third Amended and Restated Certificate of Incorporation of the Company (as amended, the “Certificate of Incorporation”),
authorizes the issuance of 336,372,704 shares of capital stock, consisting of (i) 312,285,439 shares of common stock, par value $0.0001
per share (“Common Stock”), divided into two series of common stock composed of (A) 307,855,751 shares of Class A
Common Stock (the “Class A Common Stock”), and (B) 4,429,688 shares of Class B Common Stock (the “Class B
Common Stock”); and (ii) 24,087,265 shares of preferred stock, par value $0.0001 per share (“Preferred Stock”),
issuable from time to time in one or more series, and further provides that the Board is authorized to provide for the issue of all or
any of the shares of Preferred Stock in one or more series;
WHEREAS,
Article IV, Section 4.2 of the Certificate of Incorporation provides that the Board is authorized to provide from time to time by resolution
or resolutions for the creation and issuance, out of the authorized and unissued shares of the Preferred Stock, of one or more series
of Preferred Stock by filing a certificate pursuant to the DGCL, setting forth such resolution and, with respect to each such series,
establishing the designation of such series and the number of shares to be included in such series and fixing the voting powers (full
or limited, or no voting power), preferences and relative, participating, optional or other special rights, and the qualifications, limitations
and restrictions thereof, of the shares of each such series;
WHEREAS,
the Board has determined that it is reasonable, advisable, fair and in the best interests of the Company and its stockholders to establish
and issue a new series of Preferred Stock, designated as Series C Convertible Preferred Stock (the “Series C Convertible Preferred
Stock”, or the “Preferred Shares”), and to establish the rights, powers, preferences, privileges and restrictions
of the Series C Convertible Preferred Stock.
NOW,
THEREFORE, BE IT RESOLVED that, pursuant to the authority vested in the Board in accordance with the provisions of Article IV of
the Certificate of Incorporation and the provisions of Section 151 of the DGCL, the Board hereby establishes and issues the Series C
Convertible Preferred Stock with the rights, powers, preferences, privileges and restrictions thereof.
TERMS
OF SERIES C CONVERTIBLE PREFERRED STOCK
1.
Designation and Number of Shares. There shall hereby be created and established a series of preferred stock of the Company designated
as “Series C Convertible Preferred Stock” (the “Series C Convertible Preferred Stock”). The authorized
number of shares of Series C Convertible Preferred Stock (the “Preferred Shares”) shall be 11,502 shares. Each Preferred
Share shall have a par value of $0.0001 per share. Capitalized terms not defined herein shall have the meaning as set forth in Section
30 below.
2.
Ranking. Except to the extent that each record holder (each, a “Holder”, and collectively, the “Holders”)
of Preferred Shares expressly consent to the creation of Parity Stock (as defined below) or Senior Preferred Stock (as defined below)
in accordance with Section 15, all shares of capital stock of the Company, other than the Series B Preferred Stock, par value $0.0001
per share (the “Series B Preferred Stock”), shall be junior in rank to all Preferred Shares with respect to the preferences
as to distributions and payments upon the liquidation, dissolution and winding up of the Company (such junior stock is referred to herein
collectively as “Junior Stock”). The Series B Preferred Stock shall rank pari passu with the Preferred Shares.
For the avoidance of doubt, the Preferred Shares will, with respect to rights on liquidation, winding-up and dissolution, rank (A) junior
to the Senior Preferred Stock, (B) on parity with the Parity Stock and (C) senior to the Junior Stock. The rights of all such shares
of capital stock of the Company shall be subject to the rights, powers, preferences and privileges of the Preferred Shares. Without limiting
any other provision of this Certificate of Designation, without the prior express consent of the Holder, voting separately as a single
class, the Company shall not hereafter authorize or issue any additional or other shares of capital stock that is (i) of senior rank
to the Preferred Shares in respect of the preferences as to distributions and payments upon the liquidation, dissolution and winding
up of the Company (collectively, the “Senior Preferred Stock”) or (ii) other than the Series B Preferred Stock, of
pari passu rank to the Preferred Shares in respect of the preferences as to distributions and payments upon the liquidation, dissolution
and winding up of the Company (collectively, the “Parity Stock”). In the event of the merger or consolidation of the
Company with or into another corporation, the Preferred Shares shall maintain their relative rights, powers, designations, privileges
and preferences provided for herein and no such merger or consolidation shall result inconsistent therewith.
3.
[Reserved].
4.
Conversion. At any time after the first day of issuance of any Preferred Shares ( the “Initial Issuance Date”),
each Preferred Share shall be convertible into validly issued, fully paid and non-assessable shares of Common Stock (the “Conversion
Shares”), on the terms and conditions set forth in this Section 4.
(a)
Holder’s Conversion Right. Subject to the provisions of Section 4(d), at any time or times on or after the Initial Issuance
Date, each Holder shall be entitled to convert any portion of the outstanding Preferred Shares held by such Holder into validly issued,
fully paid and non-assessable Conversion Shares in accordance with Section 4(c) at the Conversion Rate (as defined below). The Company
shall not issue any fraction of a share of Common Stock upon any conversion. If the issuance would result in the issuance of a fraction
of a share of Common Stock, the Company shall round such fraction of a share of Common Stock up to the nearest whole share. The Company
shall pay any and all transfer, stamp, issuance and similar taxes, costs and expenses (including, without limitation, fees and expenses
of the Company’s transfer agent (the “Transfer Agent”)) that may be payable with respect to the issuance and
delivery of Common Stock upon conversion of any Preferred Shares.
(b)
Conversion Rate. Except as otherwise provided herein, the number of Conversion Shares issuable upon conversion of any Preferred
Share pursuant to this Section 4 shall be determined by dividing (x) the Stated Value of such Preferred Share by (y) the Conversion Price
(the “Conversion Rate”).
(i)
For purposes of this Certificate of Designation, the term “Conversion Price” means, with respect to each Preferred
Share, as of any Conversion Date or other date of determination, $0.26, subject to adjustment as provided herein.
2
(c)
Mechanics of Conversion. The conversion of each Preferred Share shall be conducted in the following manner:
(i)
Optional Conversion. To convert one or more Preferred Shares into Conversion Shares on any date (a “Conversion Date”),
a Holder shall deliver (whether via electronic mail or otherwise), for receipt on or prior to 11:59 p.m., New York time, on such date,
a copy of an executed notice of conversion of the Preferred Share(s) subject to such conversion in the form attached hereto as Exhibit
I (the “Conversion Notice”) to the Company. If required by Section 4(c)(ii), within two (2) Trading Days following
a conversion of any such Preferred Shares as aforesaid, such Holder shall surrender to a nationally recognized overnight delivery service
for delivery to the Company the original certificates, if any, representing the Preferred Shares (the “Preferred Share Certificates”)
so converted as aforesaid (or an indemnification undertaking with respect to the Preferred Shares in the case of its loss, theft or destruction
as contemplated by Section 18(b)). On or before the first (1st) Trading Day following the date of receipt of a Conversion
Notice, the Company shall transmit by electronic mail an acknowledgment of confirmation and representation as to whether such shares
of Common Stock may then be resold pursuant to Rule 144 or an effective and available registration statement, in the form attached hereto
as Exhibit II, of receipt of such Conversion Notice to such Holder and the Company’s transfer agent (the “Transfer
Agent”), which confirmation shall constitute an instruction to the Transfer Agent to process such Conversion Notice in accordance
with the terms set forth herein. On or before the first (1st) Trading Day following each date on which the Company has received
a Conversion Notice (or such earlier date as required pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement
of a trade initiated on the applicable Conversion Date of such Conversion Shares issuable pursuant to such Conversion Notice) (the “Share
Delivery Deadline”), the Company shall (1) provided that the Transfer Agent is participating in the Depository Trust Company
(“DTC”) Fast Automated Securities Transfer Program (“FAST”) and such shares of Common Stock (i)
(A) may then be sold by the applicable Holder pursuant to an available and effective registration statement and (B) such Holder provides
such documentation or other information evidencing the sale of the shares of Common Stock as the Company, the Transfer Agent or legal
counsel to the Company shall reasonably request (which, for the avoidance of doubt, shall not include the requirement of a medallion
guarantee or a legal opinion) or (ii) may be sold by such Holder pursuant to Rule 144 of the 1933 Act, as applicable (the “Resale
Eligibility Conditions”), credit such aggregate number of Conversion Shares to which such Holder shall be entitled pursuant
to such conversion to such Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian
system, or (2) if the Transfer Agent is not participating in FAST or the Resale Eligibility Conditions are not satisfied, upon the request
of such Holder, issue and deliver (via reputable overnight courier) to the address as specified in such Conversion Notice, a certificate,
registered in the name of such Holder or its designee, for the number of Conversion Shares to which such Holder shall be entitled. If
the number of Preferred Shares represented by the Preferred Share Certificate(s) submitted for conversion pursuant to Section 4(c)(ii)
is greater than the number of Preferred Shares being converted, then the Company shall, as soon as practicable and in no event later
than two (2) Trading Days after receipt of the Preferred Share Certificate(s) and at its own expense, issue a new Book-Entry (in accordance
with Section 18(d)) representing the number of Preferred Shares not converted. The Person or Persons entitled to receive the Conversion
Shares issuable upon a conversion of Preferred Shares shall be treated for all purposes as the record holder or holders of such Conversion
Shares on the Conversion Date. Notwithstanding the foregoing, if a Holder delivers a Conversion Notice to the Company prior to the date
of issuance of Preferred Shares to such Holder, whereby such Holder elects to convert such Preferred Shares pursuant to such Conversion
Notice, the Share Delivery Deadline with respect to any such Conversion Notice shall be the later of (x) the date of issuance of such
Preferred Shares and (y) the first (1st) Trading Day after the date of such Conversion Notice. Notwithstanding anything to the contrary
contained in this Certificate of Designation.
3
(ii)
Company’s Failure to Timely Convert. If the Company shall fail, for any reason or for no reason, on or prior to the applicable
Share Delivery Deadline, if the Transfer Agent is not participating in FAST or the Resale Eligibility Conditions are not satisfied, to
issue and deliver to such Holder (or its designee) a certificate for the number of Conversion Shares to which such Holder is entitled
and register such Conversion Shares on the Company’s share register or, if the Transfer Agent is participating in FAST and the
Resale Eligibility Conditions are satisfied, to credit such Holder’s or its designee’s balance account with DTC for such
number of Conversion Shares to which such Holder is entitled upon such Holder’s conversion of any Conversion Amount (as the case
may be) and the Company fails to promptly (x) notify such Holder and (y) deliver the shares of Common Stock electronically without any
restrictive legend by crediting such aggregate number of shares of Common Stock to which such Holder is entitled pursuant to such conversion
to such Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal At Custodian system (the event
described in the immediately foregoing clause (I) above, a “Conversion Failure”), and if on or after such Share Delivery
Deadline such Holder acquires (in an open market transaction, stock loan or otherwise) shares of Common Stock corresponding to all or
any portion of the number of Conversion Shares issuable upon such conversion that such Holder is entitled to receive from the Company
and has not received from the Company in connection with such Conversion Failure (a “Buy-In”), then, in addition to
all other remedies available to such Holder, the Company shall, within two (2) Business Days after receipt of such Holder’s request
and in such Holder’s discretion, either: (I) pay cash to such Holder in an amount equal to such Holder’s total purchase price
(including brokerage commissions, stock loan costs and other out-of-pocket expenses, if any) for the shares of Common Stock so acquired
(including, without limitation, by any other Person in respect, or on behalf, of such Holder) (the “Buy-In Price”),
at which point the Company’s obligation to so issue and deliver such certificate (and to issue such Conversion Shares) or credit
to the balance account of such Holder or such Holder’s designee, as applicable, with DTC for the number of Conversion Shares to
which such Holder is entitled upon such Holder’s conversion hereunder (as the case may be) (and to issue such Conversion Shares)
shall terminate, or (II) promptly honor its obligation to so issue and deliver to such Holder a certificate or certificates representing
such Conversion Shares or credit the balance account of such Holder or such Holder’s designee, as applicable, with DTC for the
number of Conversion Shares to which such Holder is entitled upon such Holder’s conversion hereunder (as the case may be) and pay
cash to such Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (x) such number of shares of Common
Stock multiplied by (y) the lowest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date
of the applicable Conversion Notice and ending on the date of such issuance and payment under this clause (II). 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 certificates
representing Conversion Shares (or to electronically deliver such Conversion Shares) upon the conversion of the Preferred Shares as required
pursuant to the terms hereof. Notwithstanding anything herein to the contrary, with respect to any given Conversion Failure, as applicable,
this Section 4(c)(ii) shall not apply to a Holder to the extent the Company has already paid such amounts in full to such Holder with
respect to such Conversion Failure, as applicable, pursuant to the analogous sections of the Purchase Agreement.
4
(iii)
Registration; Book-Entry. The Company shall maintain a register (the “Register”) for the recordation of the
names and addresses of the Holders of each Preferred Share and the Stated Value of the Preferred Shares (the “Registered Preferred
Shares”). The entries in the Register shall be conclusive and binding for all purposes absent manifest error. The Company and
each Holder of the Preferred Shares shall treat each Person whose name is recorded in the Register as the owner of a Preferred Share
for all purposes notwithstanding notice to the contrary. A Registered Preferred Share may be assigned, transferred or sold only by registration
of such assignment or sale on the Register. Upon its receipt of a written request to assign, transfer or sell one or more Registered
Preferred Shares by such Holder thereof, the Company shall record the information contained therein in the Register and issue one or
more new Registered Preferred Shares in the same aggregate Stated Value as the Stated Value of the surrendered Registered Preferred Shares
to the designated assignee or transferee pursuant to Section 18, provided that if the Company does not so record an assignment,
transfer or sale (as the case may be) of such Registered Preferred Shares within two (2) Business Days of such a request, then the Register
shall be automatically deemed updated to reflect such assignment, transfer or sale (as the case may be). Each Holder and the Company
shall maintain records showing the Stated Value converted and/or paid (as the case may be) and the dates of such conversions and/or payments
(as the case may be) or shall use such other method, reasonably satisfactory to such Holder and the Company. If the Company does not
update the Register to record such Stated Value converted and/or paid (as the case may be) and the dates of such conversions and/or payments
(as the case may be) within two (2) Business Days of such occurrence, then the Register shall be automatically deemed updated to reflect
such occurrence. In the event of any dispute or discrepancy, the records of the Company establishing the number of Preferred Shares to
which the record holder is entitled shall be controlling and determinative in the absence of manifest error. Each Preferred Share Certificate,
if any, shall bear the following legend:
ANY
TRANSFEREE OR ASSIGNEE OF THIS CERTIFICATE SHOULD CAREFULLY REVIEW THE TERMS OF THE CORPORATION’S CERTIFICATE OF DESIGNATION RELATING
TO THE SHARES OF SERIES B CONVERTIBLE PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE, INCLUDING SECTION 4(c)(ii) THEREOF. THE NUMBER
OF SHARES OF SERIES B CONVERTIBLE PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE MAY BE LESS THAN THE NUMBER OF SHARES OF SERIES B CONVERTIBLE
PREFERRED STOCK STATED ON THE FACE HEREOF PURSUANT TO SECTION 4(c)(ii) OF THE CERTIFICATE OF DESIGNATION RELATING TO THE SHARES OF SERIES
B CONVERTIBLE PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE.
5
(iv)
Pro Rata Conversion; Disputes. In the event that the Company receives a Conversion Notice from more than one Holder for the same
Conversion Date and the Company can convert some, but not all, of such Preferred Shares submitted for conversion, the Company shall convert
from each Holder electing to have Preferred Shares converted on such date a pro rata amount of such Holder’s Preferred Shares submitted
for conversion on such date based on the number of Preferred Shares submitted for conversion on such date by such Holder relative to
the aggregate number of Preferred Shares submitted for conversion on such date. In the event of a dispute as to the number of Conversion
Shares issuable to a Holder in connection with a conversion of Preferred Shares, the Company shall issue to such Holder the number of
Conversion Shares not in dispute and resolve such dispute in accordance with Section 23. If a Conversion Notice delivered to the Company
would result in a breach of Section 4(d) below, and the applicable Holder does not elect in writing to withdraw, in whole, such Conversion
Notice, the Company shall hold such Conversion Notice in abeyance until such time as such Conversion Notice may be satisfied without
violating Section 4(d) below (with such calculations thereunder made as of the date such Conversion Notice was initially delivered to
the Company).
(d)
Limitation on Beneficial Ownership.
(i)
Principal Market Regulation. The Company shall not issue any shares of Common Stock upon conversion of any Preferred Shares or
otherwise pursuant to the terms of this Certificate of Designation or other Transaction Documents if the issuance of such shares of Common
Stock would exceed the aggregate number of shares of Common Stock which the Company may issue upon conversion of the Preferred Shares
without breaching the Company’s obligations under the rules and regulations the listing rules of the Principal Market (the maximum
number of shares of Common Stock which may be issued without violating such rules and regulations, the “Exchange Cap”),
except that such limitation shall not apply in the event that the Company obtains the approval of its stockholders as required by the
applicable rules and regulations of the Principal Market for issuances of shares of Common Stock in excess of such amount. Until such
approval is obtained, no Holder shall be issued in the aggregate, upon conversion of any Preferred Shares, upon exercise of the Warrants,
or otherwise pursuant to the Purchase Agreement, shares of Common Stock in an amount greater than the product of (i) the Exchange Cap
as of the date of the Original Purchase Agreement, multiplied by (ii) the quotient of (1) the aggregate number of Preferred Shares issued
to such Holder on the Initial Issuance Date, divided by (2) the aggregate number of shares of Preferred Shares and Parity Stock outstanding
as of the Initial Issuance Date (with respect to each Holder, the “Exchange Cap Allocation”). In the event that any
Holder shall sell or otherwise transfer any of such Holder’s Preferred Shares, the transferee shall be allocated a pro rata portion
of such Holder’s Exchange Cap Allocation with respect to such portion of such Preferred Shares so transferred, and the restrictions
of the prior sentence shall apply to such transferee with respect to the portion of the Exchange Cap Allocation so allocated to such
transferee. Upon conversion in full of a Holder’s Preferred Shares, the difference (if any) between such Holder’s Exchange
Cap Allocation and the number of shares of Common Stock actually issued to such Holder upon such Holder’s conversion in full of
such Preferred Shares shall be allocated, to the remaining holders of Preferred Shares and Parity Stock on a pro rata basis in proportion
to the shares of Common Stock underlying the shares of preferred stock of the Company then held by each such holder of Preferred Shares
and/or Parity Stock, as applicable.
6
(ii)
Insufficient Shares. The Company is not obligated to effect the conversion of any share of Series C Convertible Preferred Stock,
and the Holder shall not have the right to convert any share of Series C Convertible Preferred Stock pursuant to the terms herein and
any such conversion shall be null and void and treated as if never made, if the Company does not have sufficient number of authorized
but unissued and unreserved shares of Common Stock available to effect for such conversion.
(e)
Right of Alternate Conversion.
(i)
General. Subject to Section 4(d), at any time, at the option of the Holder, the Holder may convert (each, an
“Alternate Optional Conversion”, and the date of such Alternate Optional Conversion, an “Alternate Optional
Conversion Date”) all, or any part, of the Preferred Shares into shares of Common Stock (such portion of the Conversion Amount
subject to such Alternate Optional Conversion, the “Alternate Optional Conversion Amount”) at the Alternate Conversion
Price (each, an “Alternate Conversion”).
(ii)
Alternate Conversion Upon a Triggering Event. Subject to Section 4(d), at any time after the occurrence of
an Triggering Event (regardless of whether such Triggering Event has been cured, or if the Company has delivered a Triggering Event Notice
to the Holder or if the Holder has notified the Company that a Triggering Event has occurred), the Holder may, at the Holder’s
option, convert (each, an “Alternate Triggering Event Conversion” and together with each Alternate Optional Conversion,
each, an “Alternate Conversion”, and the date of such Alternate Triggering Event Conversion, each, an “Alternate
Triggering Event Conversion Date”, and together with each Alternate Optional Conversion Date, each, an “Alternate
Conversion Date”) all, or any part of, the Conversion Amount (such portion of the Conversion Amount subject to such Alternate
Conversion, the “Alternate Triggering Event Conversion Amount” and together with each Alternate Optional Conversion
Amount, each, an “Alternate Conversion Amount”) into shares of Common Stock at the Alternate Conversion Price.
(iii)
Mechanics of Alternate Conversion. On any Alternate Conversion Date, the Holder may voluntarily convert any Alternate Optional
Conversion Amount pursuant to Section 4(c) (with “Alternate Conversion Price” replacing “Conversion
Price” for all purposes hereunder with respect to such Alternate Conversion by designating in the Conversion Notice delivered
pursuant to this Section 4(e) of this Note that the Holder is electing to use the Alternate Conversion Price for such conversion.
Notwithstanding anything to the contrary in this Section 4(e), but subject to Section 4(d), until the Company delivers shares
of Common Stock representing the applicable Alternate Conversion Amount to the Holder, such Alternate Conversion Amount may be converted
by the Holder into shares of Common Stock pursuant to Section 4(c) without regard to this Section 4(e).
7
5.
Triggering Events.
(a)
General. Each of the following events shall constitute a “Triggering Event”:
(i)
the suspension from trading or the failure of the Common Stock to be trading or listed (as applicable) on an Eligible Market for a period
of ten (10) consecutive Trading Days;
(ii)
the Company’s (A) failure to cure a Conversion Failure with respect to an aggregate value in excess of $2,000,000 (value being
calculated based on the greater of (x) the Conversion Amount converted and (y) the then market price of the Common Stock) by delivery
of the required number of shares of Common Stock within ten (10) Trading Days after the applicable Conversion Date or exercise date (as
the case may be); or (B) notice, written or oral, to any holder of Preferred Shares, including, without limitation, by way of public
announcement or through any of its agents, at any time, of its intention not to comply, as required, with a request for conversion of
any Preferred Shares into shares of Common Stock that is requested in accordance with the provisions of this Certificate of Designation,
other than pursuant to Section 4(d) hereof;
(iii)
[Reserved];
(iv)
[Reserved];
(v)
the Company fails to remove any restrictive legend on any certificate or any shares of Common Stock issued to the applicable Holder upon
conversion of the Series C Convertible Preferred Stock with an aggregate value in excess of $2,000,000 (value being calculated based
on the greater of (x) the Conversion Amount converted and (y) the then market price of the Common Stock) as and when required hereunder,
unless otherwise then prohibited by applicable federal securities laws, and any such failure remains uncured for at least five (5) days;
(vi)
the occurrence of any default under, redemption of or acceleration prior to maturity of at least an aggregate of $1,500,000 of Indebtedness
(as defined in the Purchase Agreement) of the Company or any of its Subsidiaries;
(vii)
bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors shall be instituted
by or against the Company or any Subsidiary and, if instituted against the Company or any Subsidiary by a third party, shall not be dismissed
within sixty (60) days of their initiation;
8
(viii)
the commencement by the Company or any Subsidiary of a voluntary case or proceeding under any applicable federal, state or foreign bankruptcy,
insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by it to the entry of a decree, order, judgment or other similar document in respect of the Company or any Subsidiary in an involuntary
case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable federal, state or foreign law, or the consent by it to the filing of such petition or to
the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official
of the Company or any Subsidiary or of any substantial part of its property, or the making by it of an assignment for the benefit of
creditors, or the execution of a composition of debts, or the occurrence of any other similar federal, state or foreign proceeding, or
the admission by it in writing of its inability to pay its debts generally as they become due, the taking of corporate action by the
Company or any Subsidiary in furtherance of any such action or the taking of any action by any Person to commence a Uniform Commercial
Code foreclosure sale or any other similar action under federal, state or foreign law;
(ix)
the entry by a court of (i) a decree, order, judgment or other similar document in respect of the Company or any Subsidiary of a voluntary
or involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar
law or (ii) a decree, order, judgment or other similar document adjudging the Company or any Subsidiary as bankrupt or insolvent, or
approving as properly filed a petition seeking liquidation, reorganization, arrangement, adjustment or composition of or in respect of
the Company or any Subsidiary under any applicable federal, state or foreign law or (iii) a decree, order, judgment or other similar
document appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or any
Subsidiary or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance
of any such decree, order, judgment or other similar document or any such other decree, order, judgment or other similar document unstayed
and in effect for a period of sixty (60) consecutive days;
(x)
a final judgment or judgments for the payment of money aggregating in excess of $1,500,000 are rendered against the Company and/or any
of its Subsidiaries and which judgments are not, within thirty (30) days after the entry thereof, bonded, discharged, settled or stayed
pending appeal, or are not discharged within thirty (30) days after the expiration of such stay; provided, however, any judgment which
is covered by insurance or an indemnity from a credit worthy party shall not be included in calculating the $1,500,000 amount set forth
above so long as the Company provides the Holder a written statement from such insurer or indemnity provider (which written statement
shall be reasonably satisfactory to the Holder) to the effect that such judgment is covered by insurance or an indemnity and the Company
or such Subsidiary (as the case may be) will receive the proceeds of such insurance or indemnity within thirty (30) days of the issuance
of such judgment;
9
(xi)
the Company and/or any Subsidiary, individually or in the aggregate, either (i) fails to pay, when due, or within any applicable grace
period, any payment with respect to any Indebtedness in excess of $1,500,000 due to any third party (other than, with respect to unsecured
Indebtedness only, payments contested by the Company and/or such Subsidiary (as the case may be) in good faith by proper proceedings
and with respect to which adequate reserves have been set aside for the payment thereof in accordance with GAAP) or is otherwise in breach
or violation of any agreement for monies owed or owing in an amount in excess of $1,500,000, which breach or violation permits the other
party thereto to declare a default or otherwise accelerate amounts due thereunder, or (ii) suffer to exist any other circumstance or
event that would, with or without the passage of time or the giving of notice, result in a default or event of default under any agreement
binding the Company or any Subsidiary, which default or event of default would or is likely to have a material adverse effect on the
business, assets, operations (including results thereof), liabilities, properties, condition (including financial condition) or prospects
of the Company or any of its Subsidiaries, individually or in the aggregate;
(xii)
other than as specifically set forth in another clause of this Section 5(a), the Company or any Subsidiary breaches any representation
or warranty in any material respect (other than representations or warranties subject to material adverse effect or materiality, which
may not be breached in any respect) or any covenant or other term or condition of any Transaction Document, except, in the case of a
breach of a covenant or other term or condition that is curable, only if such breach remains uncured for a period of two (2) consecutive
Trading Days;
(xiii)
a false or inaccurate certification (including a false or inaccurate deemed certification) by the Company as to whether any Triggering
Event has occurred;
(xiv)
any breach or failure in any respect by the Company or any Subsidiary to comply with any provision of Section 12 of this Certificate
of Designation;
(xv)
any provision of any Transaction Document shall at any time for any reason (other than pursuant to the express terms thereof) cease to
be valid and binding on or enforceable against the Company, or the validity or enforceability thereof shall be contested, directly or
indirectly, by the Company or any Subsidiary, or a proceeding shall be commenced by the Company or any Subsidiary or any governmental
authority having jurisdiction over any of them, seeking to establish the invalidity or unenforceability thereof or the Company or any
of its Subsidiaries shall deny in writing that it has any liability or obligation purported to be created under one or more Transaction
Documents.
10
(b)
Notice of a Triggering Event. Upon the occurrence of a Triggering Event with respect to the Preferred Shares, the Company shall
within two (2) Business Days deliver written notice thereof via electronic mail and overnight courier (with next day delivery specified)
(a “Triggering Event Notice”) to each Holder.
6.
Rights Upon Fundamental Transactions.
(a)
Assumption. The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity assumes
in writing all of the obligations of the Company under this Certificate of Designation and the other Transaction Documents pursuant to
written agreements in form and substance reasonably satisfactory to the Holder, including agreements to deliver to each Holder of Preferred
Shares a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Certificate
of Designation (including, the right to convert into equity securities of the Successor Entity) and (ii) the Successor Entity (including
its Parent Entity) is a publicly traded corporation whose common stock is quoted on or listed for trading on an Eligible Market. Upon
the occurrence of any Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after
the date of such Fundamental Transaction, the provisions of this Certificate of Designation referring to the “Company” shall
refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations
of the Company under this Certificate of Designation and the other Transaction Documents with the same effect as if such Successor Entity
had been named as the Company herein and therein.
(b)
Conversion Right Upon Fundamental Transaction. Upon the consummation of any Fundamental Transaction, each Holder shall have the
right, at its sole option, to convert some or all of its Preferred Shares into the number of shares of Common Stock of the Successor
Entity (or Parent Entity), or the equivalent equity securities issued in such transaction, that such Holder would have been entitled
to receive upon conversion of such Preferred Shares immediately prior to the consummation of the Fundamental Transaction, subject to
the terms and conditions of this Certificate of Designation.
(c)
No Mandatory Redemption or Cash Payment. Notwithstanding anything to the contrary herein, neither the Company nor the Successor
Entity shall be required to redeem, repurchase, or otherwise pay cash or other property to any Holder of Preferred Shares in connection
with any Fundamental Transaction or Change of Control, except pursuant to the conversion rights set forth in Section 6(b) or pursuant
to Section 4. Any redemption or repurchase of Preferred Shares shall occur only at the sole option of the Company in accordance with
Section 9.
(d)
Successive Fundamental Transactions. The provisions of this Section 6 shall apply similarly and equally to successive Fundamental
Transactions and shall be applied without regard to any limitations on the conversion of the Preferred Shares contained in this Certificate
of Designation.
11
7.
Rights Upon Issuance of Purchase Rights and Other Corporate Events.
(a)
Purchase Rights. In addition to any adjustments pursuant to Section 8 and Section 14 below, if at any time the Company grants,
issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to all
or substantially all of the record holders of any class of Common Stock (the “Purchase Rights”), then each Holder
will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such Holder could
have acquired if such Holder had held the number of shares of Common Stock acquirable upon complete conversion of all the Preferred Shares
(without taking into account any limitations or restrictions on the convertibility of the Preferred Shares and assuming for such purpose
that all the Preferred Shares were converted at the Alternate Conversion Price as of the applicable record date) held by such Holder
immediately prior to 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, to the extent that such Holder’s right to participate in any such Purchase Right would result
in such Holder and the other Attribution Parties exceeding the Exchange Cap, then such Holder shall not be entitled to participate in
such Purchase Right to such extent of the Exchange Cap (and shall not be entitled to beneficial ownership of such shares of Common Stock
as a result of such Purchase Right (and beneficial ownership) to such extent of any such excess) and such Purchase Right to such extent
shall be held in abeyance (and, if such Purchase Right has an expiration date, maturity date or other similar provision, such term shall
be extended by such number of days held in abeyance, if applicable) for the benefit of such Holder until such time or times, if ever,
as its right thereto would not result in such Holder and the other Attribution Parties exceeding the Exchange Cap, at which time or times
such Holder shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent
Purchase Right held similarly in abeyance (and, if such Purchase Right has an expiration date, maturity date or other similar provision,
such term shall be extended by such number of days held in abeyance, if applicable)) to the same extent as if there had been no such
limitation.
(b)
Other Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any
Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect
to or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision to
ensure that each Holder will thereafter have the right, at such Holder’s option, to receive upon a conversion of all the Preferred
Shares held by such Holder (i) such securities or other assets (the “Corporate Event Consideration”) to which such
Holder would have been entitled with respect to such shares of Common Stock had such shares of Common Stock been held by such Holder
upon the consummation of such Corporate Event (without taking into account any limitations or restrictions on the convertibility of the
Preferred Shares set forth in this Certificate of Designation) or (ii) in lieu of the shares of Common Stock otherwise receivable upon
such conversion, such securities or other assets received by the holders of shares of Common Stock in connection with the consummation
of such Corporate Event in such amounts as such Holder would have been entitled to receive had the Preferred Shares held by such Holder
initially been issued with conversion rights for the form of such consideration (as opposed to shares of Common Stock) at a conversion
rate for such consideration commensurate with the Conversion Rate of an Alternate Conversion. Provision made pursuant the preceding sentence
shall be in a form and substance reasonably satisfactory to the Required Holders. The provisions of this Section 7 shall apply similarly
and equally to successive Corporate Events and shall be applied without regard to any limitations on the conversion or redemption of
the Preferred Shares set forth in this Certificate of Designation.
12
8.
Rights Upon Issuance of Other Securities.
(a)
Adjustment of Conversion Price upon Issuance of Common Stock. If and whenever on or after the Subscription Date the Company grants,
issues or sells (or enters into any agreement to grant, issue or sell), or in accordance with this Section 8(a) is deemed to have granted,
issued or sold, any shares of Common Stock (including the granting, issuance or sale of shares of Common Stock owned or held by or for
the account of the Company, but excluding any Excluded Securities granted, issued or sold or deemed to have been granted, issued or sold)
for a consideration per share (the “New Issuance Price”) less than a price equal to the Conversion Price in effect
immediately prior to such granting, issuance or sale or deemed granting, issuance or sale (such Conversion Price then in effect is referred
to herein as the “Applicable Price”) (the foregoing a “Dilutive Issuance”), then, immediately after
such Dilutive Issuance, the Conversion Price then in effect shall be reduced to an amount equal to the New Issuance Price. For all purposes
of the foregoing (including, without limitation, determining the adjusted Conversion Price and the New Issuance Price under this Section
8(a)), the following shall be applicable:
(i)
Issuance of Options. If the Company in any manner grants, issues or sells (or enters into any agreement to grant, issue or sell)
any Options and the lowest price per share for which one share of Common Stock is at any time issuable upon the exercise of any such
Option or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise
pursuant to the terms thereof is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and
to have been issued and sold by the Company at the time of the granting, issuance or sale of such Option for such price per share. For
purposes of this Section 8(a)(i), the “lowest price per share for which one share of Common Stock is at any time issuable upon
the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any
such Option or otherwise pursuant to the terms thereof” shall be equal to (1) the lower of (x) the sum of the lowest amounts of
consideration (if any) received or receivable by the Company with respect to any one share of Common Stock upon the granting, issuance
or sale of such Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon
exercise of such Option or otherwise pursuant to the terms thereof and (y) the lowest exercise price set forth in such Option for which
one share of Common Stock is issuable (or may become issuable assuming all possible market conditions) upon the exercise of any such
Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise
pursuant to the terms thereof, minus (2) the sum of all amounts paid or payable to the holder of such Option (or any other Person) with
respect to any one share of Common Stock upon the granting, issuance or sale of such Option, upon exercise of such Option and upon conversion,
exercise or exchange of any Convertible Security issuable upon exercise of such Option or otherwise pursuant to the terms thereof plus
the value of any other consideration (including, without limitation, consideration consisting of cash, debt forgiveness, assets or any
other property) received or receivable by, or benefit conferred on, the holder of such Option (or any other Person). Except as contemplated
below, no further adjustment of the Conversion Price shall be made upon the actual issuance of such share of Common Stock or of such
Convertible Securities upon the exercise of such Options or otherwise pursuant to the terms thereof or upon the actual issuance of such
shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities.
13
(ii)
Issuance of Convertible Securities. If the Company in any manner issues or sells (or enters into any agreement to issue or sell)
any Convertible Securities and the lowest price per share for which one share of Common Stock is at any time issuable upon the conversion,
exercise or exchange thereof or otherwise pursuant to the terms thereof is less than the Applicable Price, then such share of Common
Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the issuance or sale (or the time
of execution of such agreement to issue or sell, as applicable) of such Convertible Securities for such price per share. For the purposes
of this Section 8(a)(ii), the “lowest price per share for which one share of Common Stock is at any time issuable upon the conversion,
exercise or exchange thereof or otherwise pursuant to the terms thereof” shall be equal to (1) the lower of (x) the sum of the
lowest amounts of consideration (if any) received or receivable by the Company with respect to one share of Common Stock upon the issuance
or sale (or pursuant to the agreement to issue or sell, as applicable) of the Convertible Security and upon conversion, exercise or exchange
of such Convertible Security or otherwise pursuant to the terms thereof and (y) the lowest conversion price set forth in such Convertible
Security for which one share of Common Stock is issuable (or may become issuable assuming all possible market conditions) upon conversion,
exercise or exchange thereof or otherwise pursuant to the terms thereof minus (2) the sum of all amounts paid or payable to the holder
of such Convertible Security (or any other Person) with respect to any one share of Common Stock upon the issuance or sale (or the agreement
to issue or sell, as applicable) of such Convertible Security plus the value of any other consideration received or receivable (including,
without limitation, any consideration consisting of cash, debt forgiveness, assets or other property) by, or benefit conferred on, the
holder of such Convertible Security (or any other Person). Except as contemplated below, no further adjustment of the Conversion Price
shall be made upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities
or otherwise pursuant to the terms thereof, and if any such issuance or sale of such Convertible Securities is made upon exercise of
any Options for which adjustment of the Conversion Price has been or is to be made pursuant to other provisions of this Section 8(a),
except as contemplated below, no further adjustment of the Conversion Price shall be made by reason of such issuance or sale.
(iii)
Change in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the additional consideration,
if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time (other than
proportional changes in conversion or exercise prices, as applicable, in connection with an event referred to in Section 8(a) below),
the Conversion Price in effect at the time of such increase or decrease shall be adjusted to the Conversion Price which would have been
in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase price, additional
consideration or increased or decreased conversion rate (as the case may be) at the time initially granted, issued or sold. For purposes
of this Section 8(a)(iii), if the terms of any Option or Convertible Security (including, without limitation, any Option or Convertible
Security that was outstanding as of the Subscription Date) are increased or decreased in the manner described in the immediately preceding
sentence, then such Option or Convertible Security and the shares of Common Stock deemed issuable upon exercise, conversion or exchange
thereof shall be deemed to have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section 8(a)
shall be made if such adjustment would result in an increase of the Conversion Price then in effect.
14
(iv)
Calculation of Consideration Received. If any Option and/or Convertible Security and/or Adjustment Right is issued in connection
with the issuance or sale or deemed issuance or sale of any other securities of the Company (as determined by the Holder, the “Primary
Security”, and such Option and/or Convertible Security and/or Adjustment Right, the “Secondary Securities”
and together with the Primary Security, each a “Unit”), together comprising one integrated transaction (or one or
more transactions if such issuances or sales or deemed issuances or sales of securities of the Company either (A) have at least one investor
or purchaser in common, (B) are consummated in reasonable proximity to each other and/or (C) are consummated under the same plan of financing),
the aggregate consideration per share of Common Stock with respect to such Primary Security shall be deemed to be equal to the difference
of (x) the lowest price per share for which one share of Common Stock was issued (or was deemed to be issued pursuant to Section 8(a)(i)
or 8(a)(ii) above, as applicable) in such integrated transaction solely with respect to such Primary Security, minus (y) with respect
to such Secondary Securities, the sum of (I) the Black Scholes Consideration Value of each such Option, if any, (II) the fair market
value (as determined by the Holder in good faith) or the Black Scholes Consideration Value, as applicable, of such Adjustment Right,
if any, and (III) the fair market value (as determined by the Holder) of such Convertible Security, if any, in each case, as determined
on a per share basis in accordance with this Section 8(a)(iv). If any shares of Common Stock, Options or Convertible Securities
are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor (for the purpose of determining
the consideration paid for such Common Stock, Option or Convertible Security, but not for the purpose of the calculation of the Black
Scholes Consideration Value) will be deemed to be the net amount of consideration received by the Company therefor. If any shares of
Common Stock, Options or Convertible Securities are issued or sold for a consideration other than cash, the amount of such consideration
received by the Company (for the purpose of determining the consideration paid for such Common Stock, Option or Convertible Security,
but not for the purpose of the calculation of the Black Scholes Consideration Value) will be the fair value of such consideration, except
where such consideration consists of publicly traded securities, in which case the amount of consideration received by the Company for
such securities will be the arithmetic average of the VWAPs of such security for each of the five (5) Trading Days immediately preceding
the date of receipt. If any shares of Common Stock, Options or Convertible Securities are issued to the owners of the non-surviving entity
in connection with any merger in which the Company is the surviving entity, the amount of consideration therefor (for the purpose of
determining the consideration paid for such Common Stock, Option or Convertible Security, but not for the purpose of the calculation
of the Black Scholes Consideration Value) will be deemed to be the fair value of such portion of the net assets and business of the non-surviving
entity as is attributable to such shares of Common Stock, Options or Convertible Securities (as the case may be). The fair value of any
consideration other than cash or publicly traded securities will be determined jointly by the Company and the Required Holder. If such
parties are unable to reach agreement within ten (10) days after the occurrence of an event requiring valuation (the “Valuation
Event”), the fair value of such consideration will be determined within five (5) Trading Days after the tenth (10th)
day following such Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Required Holder. The
determination of such appraiser shall be final and binding upon all parties absent manifest error and the fees and expenses of such appraiser
shall be borne by the Company.
(v)
Record Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive
a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for or purchase
shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issuance or sale
of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution
or the date of the granting of such right of subscription or purchase (as the case may be).
15
(b)
Adjustment of Conversion Price upon Subdivision or Combination of Common Stock. Without limiting any provision of Section 7 or
Section 14, if the Company at any time on or after the Subscription Date subdivides (by any stock split, stock dividend, stock combination,
recapitalization or other similar transaction) one or more classes of its outstanding shares of Common Stock into a greater number of
shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced. Without limiting any provision
of Section 7 or Section 14, if the Company at any time on or after the Subscription Date combines (by any stock split, stock dividend,
stock combination, recapitalization or other similar transaction) one or more classes of its outstanding shares of Common Stock into
a smaller number of shares, the Conversion Price in effect immediately prior to such combination will be proportionately increased. Any
adjustment pursuant to this Section 8(b) shall become effective immediately after the effective date of such subdivision or combination.
If any event requiring an adjustment under this Section 8(b) occurs during the period that a Conversion Price is calculated hereunder,
then the calculation of such Conversion Price shall be adjusted appropriately to reflect such event.
(c)
Holder’s Right of Adjusted Conversion Price. In addition to and not in limitation of the other provisions of this Section
8(c), if the Company in any manner issues or sells or enters into any agreement to issue or
sell, any Common Stock, Options or Convertible Securities (any such securities, “Variable Price Securities”) after
the Subscription Date that are issuable pursuant to such agreement or convertible into or exchangeable or exercisable for shares of Common
Stock at a price which varies or may vary with the market price of the shares of Common Stock, including by way of one or more reset(s)
to a fixed price, but exclusive of such formulations reflecting share splits, share combinations, and share dividends (each of the formulations
for such variable price being herein referred to as, the “Variable Price”), the Company shall provide written notice
thereof via electronic mail and overnight courier to each Holder on the date of such agreement and/or the issuance of such shares of
Common Stock, Convertible Securities or Options, as applicable. From and after the date the Company enters into such agreement or issues
any such Variable Price Securities, each Holder shall have the right, but not the obligation, in its sole discretion to substitute the
Variable Price for the Conversion Price upon conversion of the Preferred Shares by designating in the Conversion Notice delivered upon
any conversion of Preferred Shares that solely for purposes of such conversion such Holder is relying on the Variable Price rather than
the Conversion Price then in effect. A Holder’s election to rely on a Variable Price for a particular conversion of Preferred Shares
shall not obligate such Holder to rely on a Variable Price for any future conversions of Preferred Shares.
(d)
Other Events. In the event that the Company (or any Subsidiary) shall take any action to which the provisions hereof are not strictly
applicable, or, if applicable, would not operate to protect any Holder from dilution or if any event occurs of the type contemplated
by the provisions of this Section 8 but not expressly provided for by such provisions (including, without limitation, the granting of
stock appreciation rights, phantom stock rights or other rights with equity features), then the Board shall in good faith determine and
implement an appropriate adjustment in the Conversion Price so as to protect the rights of such Holder, provided that no such adjustment
pursuant to this Section 8(d) will increase the Conversion Price as otherwise determined pursuant to this Section 8, provided further
that if such Holder does not accept such adjustments as appropriately protecting its interests hereunder against such dilution, then
the Board and such Holder shall agree, in good faith, upon an independent investment bank of nationally recognized standing to make such
appropriate adjustments, whose determination shall be final and binding absent manifest error and whose fees and expenses shall be borne
by the Company.
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(e)
Calculations. All calculations under this Section 8 shall be made by rounding to the nearest cent or the nearest 1/100th
of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held
by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.
(f)
Voluntary Adjustment by Company. Subject to the rules and regulations of the Principal Market, the Company may at any time any
Preferred Shares remain outstanding, with the prior written consent of the Holder, reduce the then current Conversion Price to any amount
and for any period of time deemed appropriate by the Board.
9.
Redemption at the Company’s Election. At any time, the Company shall have the right to redeem all, but not less than all,
of the Preferred Shares then outstanding (the “Company Optional Redemption Amount”) on the Company Optional Redemption
Date (each as defined below) (a “Company Optional Redemption”). The Preferred Shares subject to redemption pursuant
to this Section 9 shall be redeemed by the Company in cash at a price (the “Company Optional Redemption Price”) equal
to the greater of (i) 110% of the Conversion Amount being redeemed as of the Company Optional Redemption Date and (ii) the product of
(1) the Conversion Rate with respect to the Conversion Amount being redeemed as of the Company Optional Redemption Date multiplied by
(2) the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date immediately preceding
such Company Optional Redemption Notice Date and ending on the Trading Day immediately prior to the date the Company makes the entire
payment required to be made under this Section 9. The Company may exercise its right to require redemption under this Section 9 by delivering
a written notice thereof by electronic mail and overnight courier to all, but not less than all, of the Holders (the “Company
Optional Redemption Notice” and the date all of the Holders received such notice is referred to as the “Company Optional
Redemption Notice Date”). The Company may deliver only one Company Optional Redemption Notice hereunder and such Company Optional
Redemption Notice shall be irrevocable. The Company Optional Redemption Notice shall (x) state the date on which the Company Optional
Redemption shall occur (the “Company Optional Redemption Date”) which date shall not be less than fifteen (15) Trading
Days nor more than thirty (30) Trading Days following the Company Optional Redemption Notice Date, and (y) state the aggregate Conversion
Amount of the Preferred Shares which is being redeemed in such Company Optional Redemption from such Holder and all of the other Holders
of the Preferred Shares pursuant to this Section 9 on the Company Optional Redemption Date. The Company shall deliver the applicable
Company Optional Redemption Price to each Holder in cash on the applicable Company Optional Redemption Date. Notwithstanding anything
herein to the contrary, at any time prior to the date the Company Optional Redemption Price is paid, in full, the Company Optional Redemption
Amount may be converted, in whole or in part, by any Holder into shares of Common Stock pursuant to Section 4. All Conversion Amounts
converted by a Holder after the Company Optional Redemption Notice Date shall reduce the Company Optional Redemption Amount of the Preferred
Shares of such Holder required to be redeemed on the Company Optional Redemption Date. In the event of the Company’s redemption
of any of the Preferred Shares under this Section 9, a Holder’s damages would be uncertain and difficult to estimate because of
the parties’ inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment
opportunity for such Holder. Accordingly, any redemption premium due under this Section 9 is intended by the parties to be, and shall
be deemed, a reasonable estimate of such Holder’s actual loss of its investment opportunity and not as a penalty. For the avoidance
of doubt, the Company shall have no right to effect a Company Optional Redemption if any Triggering Event has occurred and is continuing,
but any Triggering Event shall have no effect upon any Holder’s right to convert Preferred Shares in its discretion.
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10.
Noncircumvention. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation,
bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of
securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Certificate
of Designation, and will at all times in good faith carry out all the provisions of this Certificate of Designation and take all action
as may be required to protect the rights of the Holders hereunder. Without limiting the generality of the foregoing or any other provision
of this Certificate of Designation or the other Transaction Documents, the Company (a) shall not increase the par value of any shares
of Common Stock receivable upon the conversion of any Preferred Shares above the Conversion Price then in effect, and (b) shall take
all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable
shares of Common Stock upon the conversion of Preferred Shares. Notwithstanding anything herein to the contrary, if after the sixty (60)
calendar day anniversary of the Initial Issuance Date, each Holder is not permitted to convert such Holder’s Preferred Shares in
full for any reason (other than pursuant to restrictions set forth in Section 4(d) hereof), the Company shall use its best efforts to
promptly remedy such failure, including, without limitation, obtaining such consents or approvals as necessary to effect such conversion
into shares of Common Stock.
11.
Voting Rights. Except as otherwise required by law, the holders of the shares of Series C Convertible Preferred Stock shall have
the following voting rights (and shall not have any other voting rights):
(a)
Subject to the provision for adjustment hereinafter set forth, each share of Series C Convertible Preferred Stock shall entitle the Holder
to a number of votes as if the Holder would have converted all the Series C Convertible Preferred Stock pursuant to the formula set forth
under Section 4(b), but subject to the limitation set forth in Section 4(d), on all matters submitted to a vote of the stockholders of
the Company. In the event the Company shall at any time after the date hereof (i) declare any dividend on the Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the outstanding Common Stock into a smaller number
of shares, then in each such case the number of votes per share to which holders of Series C Convertible Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such number by a fraction the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
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(b)
Except as otherwise provided herein, in the Certificate of Incorporation or in the Company’s Amended and Restated Bylaws (as amended,
the “Bylaws”), the holders of shares of Series C Convertible Preferred Stock and the holders of shares of Common Stock
shall vote together as one class on all matters submitted to a vote of the stockholders of the Company.
(c)
Except as set forth herein, in the Certificate of Incorporation or in the Bylaws, holders of Series C Convertible Preferred Stock shall
have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate action.
12.
Covenants.
(a)
Stay, Extension and Usury Laws. To the extent that it may lawfully do so, the Company (A) agrees that it will not at any time
insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law (wherever
or whenever enacted or in force) that may affect the covenants or the performance of this Certificate of Designation; and (B) expressly
waives all benefits or advantages of any such law and agrees that it will not, by resort to any such law, hinder, delay or impede the
execution of any power granted to the Holders by this Certificate of Designation, but will suffer and permit the execution of every such
power as though no such law has been enacted.
(b)
Taxes. The Company and its Subsidiaries shall pay when due all material taxes, fees or other charges of any nature whatsoever
(together with any related interest or penalties) now or hereafter imposed or assessed against the Company and its Subsidiaries or their
respective assets or upon their ownership, possession, use, operation or disposition thereof or upon their rents, receipts or earnings
arising therefrom (except where the failure to pay would not, individually or in the aggregate, have a material effect on the Company
or any of its Subsidiaries). The Company and its Subsidiaries shall file on or before the due date therefor all personal property tax
returns (except where the failure to file would not, individually or in the aggregate, have a material effect on the Company or any of
its Subsidiaries). Notwithstanding the foregoing, the Company and its Subsidiaries may contest, in good faith and by appropriate proceedings,
taxes for which they maintain adequate reserves therefor in accordance with GAAP.
(c)
PCAOB Registered Auditor. At all times any Preferred Shares remain outstanding, the Company shall have engaged an independent
auditor to audit its financial statements that is registered with (and in compliance with the rules and regulations of) the Public Company
Accounting Oversight Board.
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13.
Liquidation, Dissolution, Winding-Up. In the event of a Liquidation Event, the Holders shall be entitled to receive in cash out
of the assets of the Company, whether from capital or from earnings available for distribution to its stockholders (the “Liquidation
Funds”), before any amount shall be paid to the holders of any of shares of Junior Stock, but pari passu with any Parity Stock
then outstanding, an amount per Preferred Share equal to the greater of (A) 125% of the Conversion Amount of such Preferred Share on
the date of such payment and (B) the amount per share such Holder would receive if such Holder converted such Preferred Share into Common
Stock immediately prior to the date of such payment, provided that if the Liquidation Funds are insufficient to pay the full amount due
to the Holders and holders of shares of Parity Stock, then each Holder and each holder of Parity Stock shall receive a percentage of
the Liquidation Funds equal to the full amount of Liquidation Funds payable to such Holder and such holder of Parity Stock as a liquidation
preference, in accordance with their respective certificate of designations (or equivalent), as a percentage of the full amount of Liquidation
Funds payable to all holders of Preferred Shares and all holders of shares of Parity Stock. To the extent necessary, the Company shall
cause such actions to be taken by each of its Subsidiaries so as to enable, to the maximum extent permitted by law, the proceeds of a
Liquidation Event to be distributed to the Holders in accordance with this Section 13. All the preferential amounts to be paid to the
Holders under this Section 13 shall be paid or set apart for payment before the payment or setting apart for payment of any amount for,
or the distribution of any Liquidation Funds of the Company to the holders of shares of Junior Stock in connection with a Liquidation
Event as to which this Section 13 applies.
14.
Distribution of Assets. In addition to any adjustments pursuant to Section 7 and Section 8, if the Company shall declare or make
any dividend or other distributions of its assets (or rights to acquire its assets) to any or all holders of shares of Common Stock,
by way of return of capital or otherwise (including without limitation, any distribution of cash, stock or other securities, property
or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction)
(the “Distributions”), then each Holder, as holders of Preferred Shares, will be entitled to such Distributions as
if such Holder had held the number of shares of Common Stock acquirable upon complete conversion of the Preferred Shares (without taking
into account any limitations or restrictions on the convertibility of the Preferred Shares and assuming for such purpose that the Preferred
Share was converted at the Alternate Conversion Price as of the applicable record date) immediately prior to the date on which a record
is taken for such Distribution or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined
for such Distributions (provided, however, that to the extent that such Holder’s right to participate in any such
Distribution would result in such Holder and the other Attribution Parties exceeding the Exchange Cap, then such Holder shall not be
entitled to participate in such Distribution to such extent of the Exchange Cap (and shall not be entitled to beneficial ownership of
such shares of Common Stock as a result of such Distribution (and beneficial ownership) to such extent of any such excess) and the portion
of such Distribution shall be held in abeyance for the benefit of such Holder until such time or times as its right thereto would not
result in such Holder and the other Attribution Parties exceeding the Exchange Cap, at which time or times, if any, such Holder shall
be granted such Distribution (and any Distributions declared or made on such initial Distribution or on any subsequent Distribution held
similarly in abeyance) to the same extent as if there had been no such limitation).
20
15.
Vote to Change the Terms of or Issue Preferred Shares. In addition to any other rights provided by law, except where the vote
or written consent of the holders of a greater number of shares is required by law or by another provision of the Certificate of Incorporation,
without first obtaining the affirmative vote at a meeting duly called for such purpose or the written consent of the Holder, voting together
as a single class, the Company shall not: (a) amend or repeal any provision of, or add any provision to, its Certificate of Incorporation
or bylaws, or file any certificate of designations or articles of amendment of any series of shares of preferred stock, if such action
would adversely alter or change in any respect the preferences, rights, privileges or powers, or restrictions provided for the benefit
of the Preferred Shares hereunder, regardless of whether any such action shall be by means of amendment to the Certificate of Incorporation
or by merger, consolidation or otherwise; (b) increase or decrease (other than by conversion) the authorized number of shares of Series
C Convertible Preferred Stock; (c) without limiting any provision of Section 2, create or authorize (by reclassification or otherwise)
any new class or series of Senior Preferred Stock or Parity Stock (other than Series B Preferred Stock); (d) purchase, repurchase or
redeem any shares of Junior Stock (other than pursuant to the terms of the Company’s equity incentive plans and options and other
equity awards granted under such plans (that have in good faith been approved by the Board)); (e) without limiting any provision of Section
2, pay dividends or make any other distribution on any shares of any Junior Stock; (f) issue any Preferred Shares other than as contemplated
hereby or pursuant to the Purchase Agreement; or (g) without limiting any provision of Section 13, whether or not prohibited by the terms
of the Preferred Shares, circumvent a right of the Preferred Shares hereunder.
16.
Transfer of Preferred Shares. A Holder may offer, sell or transfer some or all of its Preferred Shares without the consent of
the Company subject only to the provisions of Section 6(f) of the Purchase Agreement.
17.
Reissuance of Preferred Share Certificates and Book Entries.
(a)
Transfer. If any Preferred Shares are to be transferred, the Holder shall provide a written instruction letter to the Company,
whereupon the Company will forthwith issue and deliver upon the order of such Holder evidence of the transfer of such Book Entry, as
such Holder may request, representing the outstanding number of Preferred Shares being transferred by such Holder and, if less than the
entire outstanding number of Preferred Shares is being transferred, evidence of such remaining Preferred Shares in Book Entry for such
Holder. Such Holder and any assignee, by acceptance of the evidence of Book Entry issuance, acknowledge and agree that, by reason of
the provisions of Section 4(c)(i) following conversion or redemption of any of the Preferred Shares, the outstanding number of Preferred
Shares represented by the Preferred Shares may be less than the number of Preferred Shares stated on the face of the Preferred Shares.
(b)
Preferred Share Certificate and Book-Entries Exchangeable for Different Denominations and Forms. Each Preferred Share Certificate
is exchangeable, upon the surrender hereof by the applicable Holder at the principal office of the Company, for a new Book-Entry (in
accordance with Section 17(c)) representing, in the aggregate, the outstanding number of the Preferred Shares in the original Preferred
Share Certificate, and each such new Book-Entry, will represent such portion of such outstanding number of Preferred Shares from the
original Preferred Share Certificate as is designated in writing by such Holder at the time of such surrender. Each Book-Entry may be
exchanged into one or more new Preferred Share Certificates or split by the applicable Holder by delivery of a written notice to the
Company into two or more new Book-Entries (in accordance with Section 17(c)) representing, in the aggregate, the outstanding number of
the Preferred Shares in the original Book-Entry, and each such new Book-Entry and/or new Preferred Share Certificate, as applicable,
will represent such portion of such outstanding number of Preferred Shares from the original Book-Entry as is designated in writing by
such Holder at the time of such surrender.
21
(c)
Issuance of New Book-Entry. Whenever the Company is required to issue a new Book Entry pursuant to the terms of this Certificate
of Designation, such new Book Entry (i) shall represent, as indicated in such Book Entry, the number of Preferred Shares remaining outstanding
(or in the case of a new Book Entry being issued pursuant to Section 17(a) or Section 17(b), the number of Preferred Shares designated
by such Holder), which, when added to the number of Preferred Shares represented by the other new Book Entry, issued in connection with
such issuance, does not exceed the number of Preferred Shares remaining outstanding under the original Book Entry, immediately prior
to such issuance of new Book Entry, and (ii) shall have an issuance date, as indicated in such new Book Entry, which is the same as the
issuance date of the original evidence.
18.
Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Certificate of Designation
shall be cumulative and in addition to all other remedies available under this Certificate of Designation and any of the other Transaction
Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall
limit any Holder’s right to pursue actual and consequential damages for any failure by the Company to comply with the terms of
this Certificate of Designation. No failure on the part of a Holder to exercise, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial exercise by such Holder of any right, power or remedy preclude
any other or further exercise thereof or the exercise of any other right, power or remedy. In addition, the exercise of any right or
remedy of a Holder at law or equity or under this Certificate of Designation or any of the documents shall not be deemed to be an election
of such Holder’s rights or remedies under such documents or at law or equity. The Company covenants to each Holder that there shall
be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with
respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by a Holder and shall
not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). No failure
on the part of a Holder to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise by such Holder of any right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy. In addition, the exercise of any right or remedy of any Holder at law or equity
or under Preferred Shares or any of the documents shall not be deemed to be an election of such Holder’s rights or remedies under
such documents or at law or equity. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable
harm to the Holders and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event
of any such breach or threatened breach, each Holder shall be entitled, in addition to all other available remedies, to specific performance
and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of competent jurisdiction in any such
case without the necessity of proving actual damages and without posting a bond or other security. The Company shall provide all information
and documentation to a Holder that is requested by such Holder to enable such Holder to confirm the Company’s compliance with the
terms and conditions of this Certificate of Designation.
22
19.
Payment of Collection, Enforcement and Other Costs. If (a) any Preferred Shares are placed in the hands of an attorney for collection
or enforcement or is collected or enforced through any legal proceeding or a Holder otherwise takes action to collect amounts due under
this Certificate of Designation with respect to the Preferred Shares or to enforce the provisions of this Certificate of Designation
or (b) there occurs any bankruptcy, reorganization, receivership of the Company or other proceedings affecting Company creditors’
rights and involving a claim under this Certificate of Designation, then the Company shall pay the costs reasonably incurred by such
Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding,
including, without limitation, attorneys’ fees and disbursements. The Company expressly acknowledges and agrees that no amounts
due under this Certificate of Designation with respect to any Preferred Shares shall be affected, or limited, by the fact that the purchase
price paid for each Preferred Share was less than the original Stated Value thereof.
20.
Construction; Headings. This Certificate of Designation shall be deemed to be jointly drafted by the Company and the Holders and
shall not be construed against any such Person as the drafter hereof. The headings of this Certificate of Designation are for convenience
of reference and shall not form part of, or affect the interpretation of, this Certificate of Designation. Unless the context clearly
indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter, singular and plural forms thereof.
The terms “including,” “includes,” “include” and words of like import shall be construed broadly
as if followed by the words “without limitation.” The terms “herein,” “hereunder,” “hereof”
and words of like import refer to this entire Certificate of Designation instead of just the provision in which they are found. Unless
expressly indicated otherwise, all section references are to sections of this Certificate of Designation. Terms used in this Certificate
of Designation and not otherwise defined herein, but defined in the other Transaction Documents, shall have the meanings ascribed to
such terms on the Initial Issuance Date in such other Transaction Documents unless otherwise consented to in writing by the Required
Holders.
21.
Failure or Indulgence Not Waiver. No failure or delay on the part of a Holder in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or privilege. No waiver shall be effective unless it is in writing and
signed by an authorized representative of the waiving party. This Certificate of Designation shall be deemed to be jointly drafted by
the Company and all Holders and shall not be construed against any Person as the drafter hereof. Notwithstanding the foregoing, nothing
contained in this Section 21 shall permit any waiver of any provision of Section 4(d).
23
22.
Dispute Resolution.
(a)
Submission to Dispute Resolution.
(i)
In the case of a dispute relating to a Closing Bid Price, a Closing Sale Price, a Conversion Price, an Alternate Conversion Price, a
Black Scholes Consideration Value, a VWAP or a fair market value or the arithmetic calculation of a Conversion Rate, or the applicable
redemption price (as the case may be) (including, without limitation, a dispute relating to the determination of any of the foregoing),
the Company or the applicable Holder (as the case may be) shall submit the dispute to the other party via electronic mail (A) if by the
Company, within two (2) Business Days after the occurrence of the circumstances giving rise to such dispute or (B) if by such Holder
at any time after such Holder learned of the circumstances giving rise to such dispute. If such Holder and the Company are unable to
promptly resolve such dispute relating to such Closing Bid Price, such Closing Sale Price, such Conversion Price, such Alternate Conversion
Price, such Black Scholes Consideration Value, such VWAP or such fair market value, or the arithmetic calculation of such Conversion
Rate or such applicable redemption price (as the case may be), at any time after the second (2nd) Business Day following such
initial notice by the Company or such Holder (as the case may be) of such dispute to the Company or such Holder (as the case may be),
then such Holder may, with the consent of the Company (not to be unreasonably withheld, conditioned or delayed), select an independent,
reputable investment bank to resolve such dispute.
(ii)
Such Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered in accordance
with the first sentence of this Section 22 and (B) written documentation supporting its position with respect to such dispute, in each
case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following the date on which such
Holder selected such investment bank (the “Dispute Submission Deadline”) (the documents referred to in the immediately
preceding clauses (A) and (B) are collectively referred to herein as the “Required Dispute Documentation”) (it being
understood and agreed that if either such Holder or the Company fails to so deliver all of the Required Dispute Documentation by the
Dispute Submission Deadline, then the party who fails to so submit all of the Required Dispute Documentation shall no longer be entitled
to (and hereby waives its right to) deliver or submit any written documentation or other support to such investment bank with respect
to such dispute and such investment bank shall resolve such dispute based solely on the Required Dispute Documentation that was delivered
to such investment bank prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by both the Company and such
Holder or otherwise requested by such investment bank, neither the Company nor such Holder shall be entitled to deliver or submit any
written documentation or other support to such investment bank in connection with such dispute (other than the Required Dispute Documentation).
24
(iii)
The Company and such Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company and such
Holder of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline. The dispute shall
be governed by the laws of the state of Delaware, and hearings held by the arbitrator, if any, shall take place in Wilmington, New Castle
Country, State of Dwlaware or such other location as mutually agreed between the parties. The fees and expenses of such investment bank
shall be borne by the party in whose favor the investment bank decides such dispute or, in the event that the investment bank determines
that the applicable calculation is in between the amounts submitted by the Company and such Holder, then half of such fees and expenses
shall be borne by the Company and half of such fees and expenses shall be borne by the Holder, and such investment bank’s resolution
of such dispute shall be final and binding upon all parties absent manifest error.
(b)
Miscellaneous. The Company expressly acknowledges and agrees that (i) this Section 22 constitutes an agreement to arbitrate between
the Company and each Holder (and constitutes an arbitration agreement) under the rules then in effect under Delaware Uniform Arbitration
Act, (ii) the terms of this Certificate of Designation and each other applicable Transaction Document shall serve as the basis for the
selected investment bank’s resolution of the applicable dispute, such investment bank shall be entitled (and is hereby expressly
authorized) to make all findings, determinations and the like that such investment bank determines are required to be made by such investment
bank in connection with its resolution of such dispute and in resolving such dispute such investment bank shall apply such findings,
determinations and the like to the terms of this Certificate of Designation and any other applicable Transaction Documents, (iii) the
applicable Holder (and only such Holder with respect to disputes solely relating to such Holder), in its sole discretion, shall have
the right to submit any dispute described in this Section 22 to any state or federal court sitting in Wilmington, Delaware, in lieu of
utilizing the procedures set forth in this Section 22 and (iv) nothing in this Section 22 shall limit such Holder from obtaining any
injunctive relief or other equitable remedies (including, without limitation, with respect to any matters described in this Section 22).
23.
Notices; Currency; Payments.
(a)
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Certificate of Designation
must be in writing and will be deemed to have been delivered on the earliest of: (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by electronic mail (provided that such sent email is kept on file (whether electronically or otherwise) by the sending
party and the sending party does not receive an automatically generated message from the recipient’s email server that such e-mail
could not be delivered to such recipient); or (iii) one (1) Business Day after deposit with an overnight courier service with next day
delivery specified, in each case, properly addressed to the party to receive the same. The mailing address and e-mail address for any
such communications to the Company shall be: 1990 E. Grand Avenue, El Segundo, CA, Attention: Legal Department, e-mail address: legal@ff.com,
or such other mailing address and/or e-mail address as the Company has specified by written notice given to each of the Holders in accordance
with this Section 23 not later than five (5) days prior to the effectiveness of such change. The mailing address and e-mail address for
any such communications to any Holder shall be as set forth on such Holder’s respective signature page to the Purchase Agreement,
or such other mailing address and/or e-mail address as such Holder has specified by written notice given to the Company in accordance
with this Section 23 not later than 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) mechanically or electronically generated by the sender’s
e-mail containing the time, date and recipient’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.
25
(b)
The Company shall provide each Holder with prompt written notice of all actions taken pursuant to this Certificate of Designation, including
in reasonable detail a description of such action and the reason therefore. Without limiting the generality of the foregoing, the Company
shall give written notice to each Holder (i) immediately upon any adjustment of the Conversion Price, setting forth in reasonable detail,
and certifying, the calculation of such adjustment and (ii) at least fifteen (15) days prior to the date on which the Company closes
its books or takes a record (A) with respect to any dividend or distribution upon the Common Stock, or (B) for determining rights to
vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made
known to the public prior to or in conjunction with such notice being provided to such Holder.
(c)
Currency. All dollar amounts referred to in this Certificate of Designation are in United States Dollars (“U.S. Dollars”),
and all amounts owing under this Certificate of Designation shall be paid in U.S. Dollars. All amounts denominated in other currencies
(if any) shall be converted into 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 Certificate of Designation,
the U.S. Dollar exchange rate as published in the Wall Street Journal on the relevant date of calculation (it being understood and agreed
that where an amount is calculated with reference to, or over, a period of time, the date of calculation shall be the final date of such
period of time).
(d)
Payments. Whenever any payment of cash is to be made by the Company to any Person pursuant to this Certificate of Designation,
unless otherwise expressly set forth herein, such payment shall be made in lawful money of the United States of America by wire transfer
of immediately available funds pursuant to wire transfer instructions that Holder shall provide to the Company in writing from time to
time. Whenever any amount expressed to be due by the terms of this Certificate of Designation is due on any day which is not a Business
Day, the same shall instead be due on the next succeeding day which is a Business Day.
24.
Waiver of Notice. To the extent permitted by law, the Company hereby irrevocably waives demand, notice, presentment, protest and
all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Certificate of
Designation and the Purchase Agreement.
26
25.
Governing Law. This Certificate of Designation shall be construed and enforced in accordance with, and all questions concerning
the construction, validity, interpretation and performance of this Certificate of Designation shall be governed by, the internal laws
of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware
or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Delaware. Except
as otherwise required by Section 21 above, the Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in Wilmington, New Castle County, State of Delaware, for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding
is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. 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 to
limit in any way any right to serve process in any manner permitted by law. Nothing contained herein (i) 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, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other
court ruling in favor of such Holder or (ii) shall limit, or shall be deemed or construed to limit, any provision of Section 22 above.
THE COMPANY AND EACH HOLDER HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS CERTIFICATE OF DESIGNATION OR ANY TRANSACTION CONTEMPLATED HEREBY.
26.
Judgment Currency.
(a)
If for the purpose of obtaining or enforcing judgment against the Company in any court in any jurisdiction it becomes necessary to convert
into any other currency (such other currency being hereinafter in this Section 26 referred to as the “Judgment Currency”)
an amount due in U.S. Dollars under this Certificate of Designation, the conversion shall be made at the Exchange Rate prevailing on
the Trading Day immediately preceding:
(i)
the date actual payment of the amount due, in the case of any proceeding in the courts of New York or in the courts of any other jurisdiction
that will give effect to such conversion being made on such date: or
(ii)
the date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as of
which such conversion is made pursuant to this Section 26(a)(ii) being hereinafter referred to as the “Judgment Conversion Date”).
(b)
If in the case of any proceeding in the court of any jurisdiction referred to in Section 26(a)(ii) above, there is a change in the Exchange
Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable party shall pay
such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the Exchange Rate
prevailing on the date of payment, will produce the amount of US dollars which could have been purchased with the amount of Judgment
Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion Date.
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(c)
Any amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being obtained
for any other amounts due under or in respect of this Certificate of Designation.
27.
Severability. If any provision of this Certificate of Designation is prohibited by law or otherwise determined to be invalid or
unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall
be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this Certificate of Designation so long as this Certificate of
Designation as so modified continues to express, without material change, the original intentions of the parties as to the subject matter
hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective
expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred
upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).
28.
Maximum Payments. Without limiting any provision contained in the Purchase Agreement, nothing contained herein shall be deemed
to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the
event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments
in excess of such maximum shall be credited against amounts owed by the Company to the applicable Holder and thus refunded to the Company.
29.
Stockholder Matters; Amendment.
(a)
Stockholder Matters. Any stockholder action, approval or consent required, desired or otherwise sought by the Company pursuant
to the DGCL, the Certificate of Incorporation, this Certificate of Designation or otherwise with respect to the issuance of Preferred
Shares may be effected by written consent of the Company’s stockholders or at a duly called meeting of the Company’s stockholders,
all in accordance with the applicable rules and regulations of the DGCL. This provision is intended to comply with the applicable sections
of the DGCL permitting stockholder action, approval and consent affected by written consent in lieu of a meeting.
(b)
Amendment. Except for Section 4(d)(i), which may not be amended or waived hereunder, this Certificate of Designation or any provision
hereof may be amended by obtaining the affirmative vote at a meeting duly called for such purpose, or written consent without a meeting
in accordance with the DGCL, of the Required Holders, voting separate as a single class, and with such other stockholder approval, if
any, as may then be required pursuant to the DGCL and the Certificate of Incorporation. Except
(a) to the extent otherwise expressly provided in this Certificate of Designation or the Certificate of Incorporation with respect
to voting or approval rights of a particular class or series of capital stock or (b) to the extent otherwise provided pursuant to
the DGCL, the holders of each outstanding class or series of shares of the Company shall not be entitled to vote as a separate voting
group on any amendment to the terms of this Certificate of Designation with respect to which such class or series would otherwise be
entitled under the DGCL to vote as a separate voting group.
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30.
Certain Defined Terms. For purposes of this Certificate of Designation, the following terms shall have the following meanings:
(a)
“1933 Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.
(b)
“1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
(c)
“Adjustment Right” means any right granted with respect to any securities issued in connection with, or with respect
to, any issuance or sale (or deemed issuance or sale in accordance with Section 8(a)) of shares of Common Stock (other than rights of
the type described in Section 7(a) hereof) that could result in a decrease in the net consideration received by the Company in connection
with, or with respect to, such securities (including, without limitation, any cash settlement rights, cash adjustment or other similar
rights).
(d)
“Affiliate” or “Affiliated” means, with respect to any Person, any other Person that directly or
indirectly controls, is controlled by, or is under common control with, such Person, it being understood for purposes of this definition
that “control” of a Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary
voting power for the election of directors of such Person or direct or cause the direction of the management and policies of such Person
whether by contract or otherwise.
(e)
“Alternate Conversion Floor Amount” means an amount in cash, to be delivered by wire transfer of immediately available
funds pursuant to wire instructions delivered to the Company by the Holder in writing, equal to the product obtained by multiplying (A)
higher of (I) the highest price that the Common Stock trades at on the Trading Day immediately preceding the relevant Alternate Conversion
Date and (II) the applicable Alternate Conversion Price and (B) the difference obtained by subtracting (I) the number of shares of Common
Stock delivered (or to be delivered) to the Holder on the applicable Share Delivery Deadline with respect to such Alternate Conversion
from (II) the quotient obtain by dividing (x) the applicable Conversion Amount that the Holder has elected to be the subject of the applicable
Alternate Conversion, by (y) the applicable Alternate Conversion Price without giving effect to clause (x) of such definition.
(f)
“Alternate Conversion Price” means, with respect to any Alternate Conversion that price which shall be the lower of
(i) the applicable Conversion Price as in effect on the applicable Conversion Date of the applicable Alternate Conversion, and (ii) the
greater of (x) the Floor Price and (y) 100% of the closing price of the Common Stock on the Trading Day immediately preceding the delivery
or deemed delivery of the applicable Conversion Notice (such period, the “Alternate Conversion Measuring Period”).
All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar
transaction that proportionately decreases or increases the Common Stock during such Alternate Conversion Measuring Period.
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(g)
“Approved Stock Plan” means any employee benefit plan which has been approved by the board of directors of the Company
prior to or subsequent to the Subscription Date pursuant to which shares of Common Stock and standard options to purchase Common Stock
may be issued to any employee, officer or director for services provided to the Company in their capacity as such.
(h)
“Attribution Parties” means, collectively, the following Persons and entities: (i) any investment vehicle, including,
any funds, feeder funds or managed accounts, currently, or from time to time after the Initial Issuance Date, directly or indirectly
managed or advised by a Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates
of such Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with such Holder
or any of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock would or could be aggregated
with such Holder’s and the other Attribution Parties for purposes of Section 13(d) of the 1934 Act. For clarity, the purpose of
the foregoing is to subject collectively such Holder and all other Attribution Parties to the Exchange Cap.
(i)
“Black Scholes Consideration Value” means the value of the applicable Option, Convertible Security or Adjustment Right
(as the case may be) as of the date of issuance thereof calculated using the Black Scholes Option Pricing Model obtained from the “OV”
function on Bloomberg utilizing (i) an underlying price per share equal to the Closing Sale Price of the Common Stock on the Trading
Day immediately preceding the public announcement of the execution of definitive documents with respect to the issuance of such Option,
Convertible Security or Adjustment Right (as the case may be), (ii) a risk-free interest rate corresponding to the U.S. Treasury rate
for a period equal to the remaining term of such Option, Convertible Security or Adjustment Right (as the case may be) as of the date
of issuance of such Option, Convertible Security or Adjustment Right (as the case may be), (iii) a zero cost of borrow and (iv) an expected
volatility equal to the greater of 100% and the 100 day volatility obtained from the “HVT” function on Bloomberg (determined
utilizing a 365 day annualization factor) as of the Trading Day immediately following the date of issuance of such Option, Convertible
Security or Adjustment Right (as the case may be).
(j)
“Bloomberg” means Bloomberg, L.P.
(k)
“Book-Entry” means each entry on the Register evidencing one or more Preferred Shares held by a Holder in lieu of
a Preferred Share Certificate issuable hereunder.
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(l)
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New
York are authorized or required by law to remain closed; provided, however, for clarification,
commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”,
“non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the
direction of any Governmental Authority so long as the electronic funds transfer systems (including for wire transfers) of commercial
banks in The City of New York generally are open for use by customers on such day.
(m)
“Change of Control” means any Fundamental Transaction other than (i) any merger of the Company or any of its, direct
or indirect, wholly-owned Subsidiaries with or into any of the foregoing Persons, (ii) any reorganization, recapitalization or reclassification
of the shares of Common Stock in which holders of the Company’s voting power immediately prior to such reorganization, recapitalization
or reclassification continue after such reorganization, recapitalization or reclassification to hold publicly traded securities and,
directly or indirectly, are, in all material respects, the holders of the voting power of the surviving entity (or entities with the
authority or voting power to elect the members of the board of directors (or their equivalent if other than a corporation) of such
entity or entities) after such reorganization, recapitalization or reclassification, or (iii) pursuant to a migratory merger effected
solely for the purpose of changing the jurisdiction of incorporation of the Company or any of its Subsidiaries.
(n)
“Closing Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing
bid price and 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 bid price or the closing trade price
(as the case may be) then the last bid price or last trade price, respectively, 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 closing bid price or last trade price, respectively, 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 closing bid price or last trade
price, respectively, of such security in the over-the-counter market on the electronic bulletin board for such security as reported by
Bloomberg, or, if no closing bid price or last trade price, respectively, 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 Pink Open Market (or a similar
organization or agency succeeding to its functions of reporting prices). If the Closing Bid Price or the Closing Sale Price cannot be
calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price or the Closing Sale Price (as the
case may be) of such security on such date shall be the fair market value as mutually determined by the Company and the Required Holders.
If the Company and the Required Holders are unable to agree upon the fair market value of such security, then such dispute shall be resolved
in accordance with the procedures in Section 23. All such determinations shall be appropriately adjusted for any stock splits, stock
dividends, stock combinations, recapitalizations or other similar transactions during such period.
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(o)
“Closing Date” shall have the meaning set forth in the Purchase Agreement, which date is the date the Company initially
issued the Preferred Shares pursuant to the terms of the Purchase Agreement.
(p)
“Code” means the Internal Revenue Code of 1986, as amended.
(q)
“Common Stock” means (i) the Company’s shares of Class A common stock, $0.0001 par value per share.
(r)
“Contingent Obligation” means, as to any Person, any direct or indirect liability, contingent or otherwise, of that
Person with respect to any Indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the
Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability
will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will
be protected (in whole or in part) against loss with respect thereto.
(s)
“Conversion Floor Price Condition” means that the relevant Alternate Conversion Price is being determined based on
clause (ii)(x) of such definition.
(t)
“Convertible Securities” means any stock or other security (other than Options) that is at any time and under any
circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof
to acquire, any shares of Common Stock.
(u)
“Eligible Market” means The New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, the Nasdaq
Global Market, the Nasdaq Capital Market.
(v)
“Excluded Securities” means (i) shares of Common Stock or standard options to purchase Common Stock issued to directors,
officers or employees of the Company for services rendered to the Company in their capacity as such pursuant to an Approved Stock Plan
(as defined above), provided that (A) all such issuances (taking into account the shares of Common Stock issuable upon exercise of such
options) after the Subscription Date pursuant to this clause (i) do not, in the aggregate, exceed more than 5% of the Common Stock issued
and outstanding immediately prior to the Subscription Date and (B) the exercise price of any such options is not lowered, none of such
options are amended to increase the number of shares issuable thereunder and none of the terms or conditions of any such options are
otherwise materially changed in any manner that adversely affects any of the Buyers; (ii) shares of Common Stock issued upon the conversion
or exercise of Convertible Securities or Options (other than standard options to purchase Common Stock issued pursuant to an Approved
Stock Plan that are covered by clause (i) above) issued prior to the Subscription Date, provided that the conversion price of any such
Convertible Securities (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered
by clause (i) above) is not lowered, none of such Convertible Securities or Options (other than standard options to purchase Common Stock
issued pursuant to an Approved Stock Plan that are covered by clause (i) above) are amended to increase the number of shares issuable
thereunder and none of the terms or conditions of any such Convertible Securities or Options (other than standard options to purchase
Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) are otherwise materially changed in any
manner that adversely affects any of the Buyers; (iii) the shares of Common Stock issuable upon conversion of the Notes or otherwise
pursuant to the terms of the Notes; provided, that the terms of the Notes are not amended, modified or changed on or after the Subscription
Date (other than antidilution adjustments pursuant to the terms thereof in effect as of the Subscription Date); and (iv) the Existing
Senior Secured Notes, Existing Unsecured Notes and any other convertible promissory notes issued after the date of the Securities Purchase
Agreement pursuant to any Existing SPA and the shares of Common Stock issuable upon conversion of each of the foregoing.
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(w)
“Existing Senior Secured Notes” means those certain (i) senior secured convertible notes, issued from time to time,
pursuant to that certain Securities Purchase Agreement, dated as of August 15, 2022, by and among the Company and FF Simplicity Ventures
LLC, as such may be amended, modified, waived and/or supplemented, as applicable, from time to time (the “August 2022 SPA”)
and (ii) secured convertible notes, issued from time to time, pursuant to that certain Securities Purchase Agreement, dated as of September
5, 2024, by and among the Company and certain investors party thereto, as such may be amended, modified, waived and/or supplemented,
as applicable, from time to time (the “September 2024 SPA”).
(x)
“Existing SPAs” means collectively, the August 2022 SPA, the May 2023 SPA， the September 2024 SPA, the December
2024 SPA, the March 2025 SPA, and the July 2025 SPA.
(y)
“Existing Unsecured Notes” means those certain (i) unsecured convertible notes, issued from time to time, pursuant
to that certain Securities Purchase Agreement, dated as of July 14, 2025, by and among the Company and certain investors party thereto,
as such may be amended, modified, waived and/or supplemented, as applicable, from time to time (the “July 2025 SPA”);
(ii) unsecured convertible notes, issued from time to time, pursuant to that certain Securities Purchase Agreement, dated as of December
21, 2024, by and among the Company and certain investors party thereto, as such may be amended, modified, waived and/or supplemented,
as applicable, from time to time (the “December 2024 SPA”); (iii) unsecured convertible notes, issued from time to
time, pursuant to that certain Securities Purchase Agreement, dated as of March 21, 2025, by and among the Company and certain investors
party thereto, as such may be amended, modified, waived and/or supplemented, as applicable, from time to time (the “March 2025
SPA”); and (iv) unsecured convertible notes, issued, or to be issued from time to time, pursuant to that certain Securities
Purchase Agreement, dated as of May 8, 2023, by and among the Company and certain investors party thereto, as such may be amended, modified,
waived and/or supplemented, as applicable, from time to time (the “May 2023 SPA”).
(z)
“Floor Price” means $0.13 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations and
similar events); provided, however, the Company shall have the right to reduce the Floor Price, from time to time, to a
price per share not contrary to the rules and regulations promulgated by the Principal Market.
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(aa)
“Fundamental Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries,
Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the
surviving corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all
of the properties or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation
S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject
to or have its Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange offer that
is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of
Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated with any Subject
Entities making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares of Common Stock
such that all Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such purchase, tender or
exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding
shares of Common Stock, or (iv) consummate a stock or share purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Subject Entities whereby all such Subject Entities,
individually or in the aggregate, acquire in any transaction or series or related transactions, either (x) at least 50% of the outstanding
shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by
all the Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such stock purchase agreement
or other business combination were not outstanding; or (z) such number of shares of Common Stock such that the Subject Entities become
collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common
Stock, or (v) reorganize, recapitalize or reclassify its Common Stock, (B) that the Company shall, directly or indirectly, including
through subsidiaries, Affiliates or otherwise, in one or more related transactions, allow any Subject Entity individually or the Subject
Entities in the aggregate to be or become the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly
or indirectly, whether through acquisition, purchase, assignment, conveyance, tender, tender offer, exchange, reduction in outstanding
shares of Common Stock, merger, consolidation, business combination, reorganization, recapitalization, spin-off, scheme of arrangement,
reorganization, recapitalization or reclassification or otherwise in any manner whatsoever, of either (x) at least 50% of the aggregate
ordinary voting power represented by issued and outstanding Common Stock, (y) at least 50% of the aggregate ordinary voting power represented
by issued and outstanding Common Stock not held by all such Subject Entities as of the date of this Certificate of Designation calculated
as if any shares of Common Stock held by all such Subject Entities were not outstanding, or (z) a percentage of the aggregate ordinary
voting power represented by issued and outstanding shares of Common Stock or other equity securities of the Company sufficient to allow
such Subject Entities to effect a statutory short form merger or other transaction requiring other stockholders of the Company to surrender
their shares of Common Stock without approval of the stockholders of the Company or (C) directly or indirectly, including through subsidiaries,
Affiliates or otherwise, in one or more related transactions, the issuance of or the entering into any other instrument or transaction
structured in a manner to circumvent, or that circumvents, the intent of this definition in which case this definition shall be construed
and implemented in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary to correct
this definition or any portion of this definition which may be defective or inconsistent with the intended treatment of such instrument
or transaction.
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(bb)
“GAAP” means United States generally accepted accounting principles, consistently applied.
(cc)
“Group” means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5
thereunder.
(dd)
“Governmental Authority” means any federal, foreign, state, county, municipal, provincial, or local governmental authority,
court, judicial body, arbitration tribunal, government or self-regulatory organization, commission, tribunal or organization, or any
regulatory, administrative, or other agency, or any political or other subdivision, department, commission, board, bureau, branch, division,
ministry, or instrumentality of any of the foregoing.
(ee)
“Indebtedness” means of any Person means, without duplication (A) all indebtedness for borrowed money, (B) all obligations
issued, undertaken or assumed as the deferred purchase price of property or services, including, without limitation, “capital leases”
in accordance with United States generally accepted accounting principles consistently applied for the periods covered thereby (other
than trade payables entered into in the ordinary course of business consistent with past practice), (C) all reimbursement or payment
obligations with respect to letters of credit, surety bonds and other similar instruments, (D) all obligations evidenced by notes, bonds,
debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets
or businesses, (E) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights
and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property),
(F) all monetary obligations under any leasing or similar arrangement which, in connection with United States generally accepted accounting
principles, consistently applied for the periods covered thereby, is classified as a capital lease, (G) all indebtedness referred to
in clauses (A) through (F) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any mortgage, deed of trust, lien, pledge, charge, security interest or other encumbrance of any nature whatsoever
in or upon any property or assets (including accounts and contract rights) with respect to any asset or property owned by any Person,
even though the Person which owns such assets or property has not assumed or become liable for the payment of such indebtedness, and
(H) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (A) through (G)
above.
35
(ff)
“Liquidation Event” means, whether in a single transaction or series of transactions, the voluntary or involuntary
liquidation, dissolution or winding up of the Company or such Subsidiaries the assets of which constitute all or substantially all of
the assets of the business of the Company and its Subsidiaries, taken as a whole.
(gg)
“Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible
Securities.
(hh)
“Original Purchase Agreement” means that certain securities purchase agreement, dated as of January 30, 2026, by and
between the Company and the Holder.
(ii)
“Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose
common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent
Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.
(jj)
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust,
an unincorporated organization, any other entity or a government or any department or agency thereof.
(kk)
“Principal Market” means, as of any time of determination, the principal trading market, if any, in which the shares
of Common Stock then trade.
(ll)
“Purchase Agreement” means that certain amended and restated securities purchase agreement, dated as of the Subscription
Date, by and between the Company and the Holder, as may be amended from time in accordance with the terms thereof.
(mm)
“SEC” means the United States Securities and Exchange Commission or the successor thereto.
(nn)
“Securities” shall mean the Preferred Shares and the shares of Common Stock issuable upon conversion of the Preferred
Shares.
(oo)
“Stated Value” shall mean $1,000 per share, subject to adjustment for stock splits, stock dividends, recapitalizations,
reorganizations, reclassifications, combinations, subdivisions or other similar events occurring after the Initial Issuance Date with
respect to the Preferred Shares.
(pp)
“Stock Combination Event” means the occurrence at any time and from time to time on or after the Subscription Date
of any stock split, stock dividend, stock combination recapitalization or other similar transaction involving the Common Stock.
(qq)
“Subject Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
36
(rr)
“Subscription Date” means April 14, 2026.
(ss)
“Subsidiary” shall have the meaning set forth in the Purchase Agreement.
(tt)
“Successor Entity” means the Person (or, if so elected by the Required Holders, the Parent Entity) formed by, resulting
from or surviving any Fundamental Transaction or the Person (or, if so elected by the Required Holders, the Parent Entity) with which
such Fundamental Transaction shall have been entered into.
(uu)
“Trading Day” means, as applicable, (x) with respect to all price or trading volume determinations relating to the
Common Stock, any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading
market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded,
provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or
market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange
or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during
the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise designated as a Trading Day in writing by the applicable
Holder or (y) with respect to all determinations other than price determinations relating to the Common Stock, any day on which The New
York Stock Exchange (or any successor thereto) is open for trading of securities.
(vv)
“Transaction Documents” means, collectively, the Purchase Agreement and the Warrant.
(ww)
“VWAP” means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal
Market (or, if the Principal Market is not the principal trading market for such security, then on the principal securities exchange
or securities market on which such security is then traded), during the period beginning at 9:30 a.m., New York time, and ending at 4:00
p.m., New York time, as reported by Bloomberg through its “VAP” function (set to 09:30 start time and 16:00 end time) or,
if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic
bulletin board for such security during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m., New York time, as
reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the
average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in
The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices). If the VWAP cannot be calculated
for such security on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as
mutually determined by the Company and the Required Holders. If the Company and the Required Holders are unable to agree upon the fair
market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 22 . All such determinations
shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction
during such period.
(xx)
“Warrant” shall have the meaning as set forth in the Purchase Agreement
37
31.
Disclosure. Upon receipt or delivery by the Company of any notice in accordance with the terms of this Certificate of Designation,
unless the Company has in good faith determined that the matters relating to such notice do not constitute material, non-public information
relating to the Company or any of its Subsidiaries, the Company shall on or prior to 9:00 am, New York city time on the Business Day
immediately following such notice delivery date, publicly disclose such material, non-public information on a Current Report on Form
8-K or otherwise. In the event that the Company believes that a notice contains material, non-public information relating to the Company
or any of its Subsidiaries, the Company so shall indicate to the applicable Holder explicitly in writing in such notice (or promptly
(but no later than the next Business Day) following receipt of notice from such Holder, as applicable), and in the absence of any such
written indication in such notice (or notification from the Company promptly (but no later than the next Business Day) following receipt
of notice from such Holder), such Holder shall be entitled to presume that information contained in the notice does not constitute material,
non-public information relating to the Company or any of its Subsidiaries. Nothing contained in this Section 30 shall limit any obligations
of the Company, or any rights of any Holder, under Section 4.8 of the Purchase Agreement.
32.
Absence of Trading and Disclosure Restrictions. The Company acknowledges and agrees that no Holder is a fiduciary or agent of
the Company and that each Holder shall have no obligation to (a) maintain the confidentiality of any information provided by the Company
or (b) refrain from trading any securities while in possession of such information in the absence of a written non-disclosure agreement
signed by an officer of such Holder that explicitly provides for such confidentiality and trading restrictions. In the absence of such
an executed, written non-disclosure agreement, the Company acknowledges that each Holder may freely trade in any securities issued by
the Company, may possess and use any information provided by the Company in connection with such trading activity, and may disclose any
such information to any third party.
[The
remainder of the page is intentionally left blank]
38
IN
WITNESS WHEREOF, the Company has caused this Certificate of Designation of the Certificate of Incorporation Faraday Future Intelligent
Electric Inc. to be signed by its Co-Global Chief Executive Officer on this 15th day of April, 2026.
Faraday
Future Intelligent Electric Inc.
By:
/s/
Matthias Aydt
Name:
Matthias Aydt
Title:
Co-Global Chief Executive Officer
EXHIBIT
I
FARADAY
FUTURE INTELLIGENT ELECTRIC INC.
CONVERSION
NOTICE
Reference
is made to the Certificate of Designation of the Certificate of Incorporation of Faraday Future Intelligent Electric Inc., a Delaware
corporation (the “Company”) establishing the terms, preferences and rights of the Series C Convertible Preferred Stock,
$0.0001 par value (the “Preferred Shares”) of the Company (the “Certificate of Designation”). In
accordance with and pursuant to the Certificate of Designation, the undersigned hereby elects to convert the number of Preferred Shares
indicated below into shares of common stock, $0.0001 value per share (the “Common Stock”), of the Company, as of the
date specified below.
Date
of Conversion:
Aggregate
number of Preferred Shares to be converted:
Aggregate
Stated Value of such Preferred Shares to be converted:
AGGREGATE
CONVERSION AMOUNT TO BE CONVERTED:
Please
confirm the following information:
Conversion
Price:
Number
of shares of Common Stock to be issued:
☐
If this Conversion Notice is being delivered with respect
to an Alternate Conversion, check here if Holder is electing to use the following Alternate Conversion Price: ____________
Please
issue the Common Stock into which the applicable Preferred Shares are being converted to Holder, or for its benefit, as follows:
☐ Check
here if requesting delivery as a certificate to the following name and to the following address:
Issue
to:
☐ Check
here if requesting delivery by Deposit/Withdrawal at Custodian as follows:
DTC
Participant:
DTC
Number:
Account
Number:
Date:
_____________, __
Name
of Registered Holder
By:
Name:
Title:
Tax
ID: ____________________________
Address:
EXHIBIT
II
ACKNOWLEDGMENT
The
Company hereby acknowledges this Conversion Notice, (b) certifies that the above indicated number of shares of Common Stock [are][are
not] eligible to be resold by the applicable Holder either (i) pursuant to Rule 144 (subject to such Holder’s execution and delivery
to the Company of a customary 144 representation letter) or (ii) an effective and available registration statement and (c) hereby directs
_________________ to issue the above indicated number of shares of Common Stock in accordance with the Transfer Agent Instructions dated
_____________, 20__ from the Company and acknowledged and agreed to by ________________________.
FARADAY
FUTURE INTELLIGENT ELECTRIC INC.
By:
Name:
Title:
EX-4.1 — FORM OF WARRANT
EX-4.1
Filename: ea028657901ex4-1.htm · Sequence: 3
Exhibit 4.1
NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH
THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE
IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY. THIS SECURITY AND THE SECURITIES
ISSUABLE UPON EXERCISE OF THIS SECURITY HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION
THEREOF. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
COMMON STOCK PURCHASE WARRANT
faraday
future intelligent electric inc.
Warrant Shares: 1,000,000
Issuance Date: April 15, 2026
THIS COMMON STOCK PURCHASE WARRANT
(the “Warrant”) certifies that, for value received, Gold King Arthur Holding Limited or its permitted assigns (the
“Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set
forth, after the Benchmark Date (as defined below) and on or prior to 5:00 p.m. (New York City time) on April 15, 2030 (the “Expiration
Date”) but not thereafter, to subscribe for and purchase from Faraday Future Intelligent Electric Inc., a Delaware corporation
(the “Company”), up to 1,000,000 shares of Common Stock (as defined below) (as subject to adjustment hereunder, the
“Warrant Shares”). The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise
Price, as defined in Section 2(b).
Section 1. Definitions.
Capitalized terms used but not defined in this Section 1 or elsewhere in this Warrant shall have the meanings set forth in that certain
Securities Purchase Agreement, dated as of January 30, 2026, by and among the Company and the Purchaser set forth on the signature page
thereto (as amended, the “Purchase Agreement”).
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Benchmark
Date” means the date on which the Company completes delivery of the 500th FX Super One vehicle to customers.
“Board
of Directors” means the board of directors of the Company.
“Business
Day” means any day except Saturday, Sunday and any day which shall be a federal legal holiday in the United States or a day
on which the Federal Reserve Bank of New York is closed and/or any of the following exchanges on which the Common Stock is traded and
listed, or any successor(s) thereto, is not open for at least five (5) hours of trading: the Nasdaq Capital Market; the Nasdaq Global
Market; the Nasdaq Global Select Market; the New York Stock Exchange; or the NYSE American; and any successor to any of the foregoing
markets or exchanges.
“Closing
Bid Price” means, for any security as of any date, the last closing bid price and last closing trade price, respectively, for
such security on the Trading Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis
and does not designate the closing bid price or the closing trade price (as the case may be) then the last bid price or last trade price,
respectively, of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Trading Market is not the principal
securities exchange or trading market for such security, the last closing bid price or last trade price, respectively, 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 closing bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, 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 Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices). If the Closing
Bid Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid 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 shall be appropriately
adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means the Class A Common Stock of the Company, par value $0.0001 per share.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Fundamental
Transaction” shall have the meaning ascribed to such term in Section 3(c) hereunder.
“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other similar restriction.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company,
joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time,
or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Shares”
has the meaning ascribed to such term in the Purchase Agreement.
“Trading
Day” means a day on which the Common Stock is traded on a Trading Market.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market or the Nasdaq Global Select Market, the New York Stock
Exchange (or any successors to any of the foregoing.
“Transfer
Agent” means the transfer agent of the Company, if any, and any successor transfer agent of the Company.
2
“VWAP”
means, for any date following the date the Company, or any Successor Entity to the Company, is listed for trading on a Trading Market,
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, with respect to Section 3(c), the twenty (20) Trading
Days prior to such calculation) (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted
as reported by Bloomberg L.P. (“Bloomberg”) (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m.
(New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date
(or, with respect to Section 3(c), the twenty (20) Trading Days prior to such calculation) (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 in The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the volume
weighted average trading price per share of the Common Stock so reported (or, with respect to Section 3(c), the twenty (20) Trading Days
prior to such calculation), or (d) in all other cases, the fair market value of a share of Common Stock as reasonably and in good faith
determined by the Board of Directors; provided that if the Holder disagrees with the Board of Directors’ determination pursuant
to clause (d) above, the Holder and the Company shall reasonably and in good faith select an independent appraiser, the fees and expenses
of which shall be split by the Company and the Holder, to make such determination.
Section 2. Exercise.
a) Exercise of
Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or
after the Benchmark Date and on or before the Expiration Date by delivery to the Company (or such other office or agency of the Company
as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of 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 two (2) Trading Days following the date of exercise as aforesaid, the Holder shall deliver the aggregate
Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United
States bank. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization)
of any Notice of Exercise form be required. 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 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 Holder and any permitted 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 (the “Exercise Price”) per share of Common Stock under this Warrant shall mean, subject to adjustment
as provided herein, $1.50.
c) Cashless Exercise.
If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein is not
available for the issuance of the Warrant Shares to the Holder or the resale of the Warrant Shares by the Holder, then this Warrant may
also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled
to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
(A)
=
as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2.1 hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2.1 hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;
3
(B)
=
the Exercise Price of this Warrant, as adjusted hereunder; and
(X)
=
the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.
If Warrant Shares
are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act,
the 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 2.3.
Notwithstanding
anything herein to the contrary, on the Expiration Date, this Warrant shall be automatically exercised via cashless exercise pursuant
to this Section 2(c).
d)
Mechanics of Exercise.
i. Delivery of
Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent
to the Holder by crediting the account of the Holder’s or its permitted assignee’s balance account with The Depository Trust
Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such
system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant
Shares by Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant
to Rule 144, or otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder
or its permitted assignee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified
by the Holder in the Notice of Exercise by the date that is one (1) Trading Day after the delivery to the Company of the Notice of Exercise
(such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise the Holder shall be deemed
for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised,
irrespective of the date of delivery of the Warrant Shares; provided payment of the aggregate Exercise Price is received within two (2)
Trading Days following delivery of the Notice of Exercise. If the Company is then a participant in DWAC and there is an effective registration
statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder and the Company fails for any reason
to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the 3rd Trading Day following 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), $5 per Trading Day
for each Trading Day after such 3rd Trading Day following the Warrant Share Delivery Date until such Warrant Shares are delivered
or Holder rescinds such exercise. The Company agrees to use commercially reasonable efforts to maintain a transfer agent that is a participant
in the FAST program 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.
4
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 3rd Trading Day following 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 3rd Trading Day following the Warrant Share Delivery Date, and if after
such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage
firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder
anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount,
if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock
so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver
to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation
was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares
for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of
shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder.
For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted
exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of
the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written
notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount
of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to
timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.
v. No Fractional
Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As
to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election,
either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or
round up to the next whole share.
vi. Charges,
Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental
expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant
Shares shall be issued in the name of the Holder or in such name or names of any permitted transferee(s) 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 processing of any Notice of Exercise and all fees to the Depository Trust Company
(or another established clearing corporation performing similar functions) required for delivery of the Warrant Shares.
5
vii. Closing
of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
e) Holder’s
Exercise Limitations.
i. The Company shall
not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section
2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise,
the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the
Holder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial
Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned
by the Holder and its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of
this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would
be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates
or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities or instruments
of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous
to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth
in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d)
of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not
representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible
for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies,
the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates
and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the reasonable discretion of the Holder, and
the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in
relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant
is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm
the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance
with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining
the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in
(A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public
announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares
of Common Stock outstanding. Upon the written request of a Holder, the Company shall within three (3) Trading Days confirm in writing
to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall
be determined after giving effect to the conversion or exercise of securities or instruments 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 the Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company,
may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation
in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares
of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any
increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to
the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with
the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended
Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such
limitation. The limitations contained in this paragraph shall apply to a permitted successor holder of this Warrant.
6
ii. The Issuer shall
not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, to the extent
that after giving effect to the exercise set forth on the applicable Notice of Exercise, the Issuer would not have a sufficient number
of authorized shares of Common Stock to effect such exercise (an “Authorized Share Shortfall”). The Issuer shall provide
reasonably prompt notice to the Holder in the event of an Authorized Share Shortfall.
f) Issuance Restrictions.
If the Company has not obtained stockholders’ approval to the transaction contemplated under the Purchase Agreement or the financial
viability exception pursuant to Nasdaq Rule 5635(d) for the issuance of the Securities under the Purchase Agreement, then the Company
may not issue upon exercise of this Warrant a number of shares of Common Stock, which, when aggregated with the Shares issued pursuant
to the Purchase Agreement, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar
transactions of the Common Stock that occur after the date of the Purchase Agreement, exceed the 19.99% of the total outstanding Common
Stock of the Company as of the date of the Purchase Agreement (such number of shares, the “Issuable Maximum”).
Section 3. Certain
Adjustments.
(a) Stock 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 its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which,
for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides
outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse share split) outstanding
shares of Common Stock into a smaller number of shares or (iv) issues by reclassification of shares of the Common Stock any shares of
capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the
number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator
shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise
of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment
made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled
to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision,
combination or re-classification.
(b) [Reserved].
7
(c) Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions
effects any merger or consolidation of the Company with or into another unaffiliated Person or group of unaffiliated Persons, (ii) the
Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially
all of its assets in one or a series of related transactions to another unaffiliated Person or group of unaffiliated Persons, (iii) any
direct or indirect, purchase offer, tender offer or exchange offer (by another unaffiliated Person or group of unaffiliated Persons) is
completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash
or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly,
in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory
share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property in
connection with a transaction involving an unaffiliated Person or group of unaffiliated Persons, 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 or scheme of arrangement) with another unaffiliated Person or group of unaffiliated
Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares
of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making
or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”),
then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have
been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without
regard to any limitation in Section 2(e) on the exercise of this Warrant), the consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant).
For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate
Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction,
and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value
of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash
or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any exercise of this Warrant following such Fundamental Transaction.
(d) Calculations.
All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the
number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
(e) 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.
8
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 10 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. 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.
(f) [Reserved].
(g) [Reserved],
Section 4. Transfer
of Warrant.
a) Transferability.
Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof, 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.
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.
9
d) Transfer Restrictions.
If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not
be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities
or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions or current public information requirements
pursuant to Rule 144, the Company may require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant,
as the case may be, provides to the Company an opinion of counsel, the form and substance of which opinion shall be reasonably satisfactory
to the Company, to the effect that the transfer of this Warrant does not require registration under the Securities Act.
e) Representation
by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise
hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or
reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant
to sales registered or exempted under the Securities Act.
Section 5. Miscellaneous.
a) No Rights
as Stockholder Until Exercise. 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).
b) Loss, Theft,
Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to
it of the loss, theft, destruction or mutilation of this Warrant or any share 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 share certificate, if mutilated, the Company will make
and deliver a new Warrant or share certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or share certificate.
c) Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted
herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day.
d) Authorized
Shares.
The Company covenants
that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of
the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly
issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof
(other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except and to the
extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate
of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, intentionally avoid or intentionally 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 reasonably necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting
the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor
upon such exercise immediately prior to such increase in par value, (ii) take all such commercially reasonable actions in order that the
Company may validly and legally issue fully paid and nonassessable Warrant Shares (or Alternative Consideration after a Fundamental Transaction)
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.
10
Before taking any
action which would result in an adjustment in the Exercise Price, the Company shall use commercially reasonable efforts to obtain all
such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction
thereof.
e) CFIUS.
Notwithstanding anything to the contrary, at no time shall the Holder (a) be given rights that would allow it to control the Company;
(b) have access to any material nonpublic technical information in the possession of the Company; (c) have the right to appoint any member
or observer to the board of directors of the Company; or (d) be involved, other than through voting of shares, in the Company’s
substantive decision making regarding (i) the use, development, acquisition, safekeeping, or release of sensitive personal data of U.S.
citizens that the Company maintains or collects; (ii) the use, development, acquisition, or release of critical technologies; or (iii)
the management, operation, manufacture, or supply of covered investment critical infrastructure, to the extent the Company at any time
owns, operates, provides goods or service, or otherwise becomes involved in covered investment critical infrastructure. The terms in this
paragraph are defined as they are defined in Section 721 of the U.S. Defense Production Act of 1950, as amended, and the regulations at
31 C.F.R Part 800, as they may be amended from time to time.
f) Governing
Law. THIS WARRANT, AND ALL MATTERS RELATING HERETO OR ARISING HEREFROM (WHETHER SOUNDING IN CONTRACT LAW, TORT LAW OR OTHERWISE),
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES. EACH PARTY HERETO HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN NEW YORK CITY,
STATE OF NEW YORK AND IRREVOCABLY AGREES THAT, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AMENDMENT SHALL BE LITIGATED
IN SUCH COURTS. EACH PARTY HERETO EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS.
g) Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, will have restrictions
upon resale imposed by state and federal securities laws.
h) Nonwaiver.
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.
a) Notices.
Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice
of Exercise, shall be in writing and delivered personally, by email, or sent by a nationally recognized overnight courier service, addressed
to the Company, at the address set forth above Attention: Legal Department, email address Legal@ff.com, or such other email address
or address as the Company may specify for such purposes by notice to the Holders. Any and all notices or other communications or deliveries
to be provided by the Company hereunder shall be in writing and delivered personally, by email, or sent by a nationally recognized overnight
courier service addressed to each Holder at the email address of such Holder appearing on the books of the Company, or if no such email
address appears on the books of the Company. Any notice or other communication or deliveries hereunder shall be deemed given and effective
on the earliest of (i) the date of transmission, if such notice or communication is delivered via email at the email address set forth
in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the date of transmission, if such
notice or communication is delivered via email at the email address set forth in this Section on a day that is not a Trading Day or later
than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.
11
i) Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase
price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the
Company.
j) Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to seek
specific performance of its rights under this Warrant. The Company agrees that monetary damages may not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in
any action for specific performance that a remedy at law would be adequate.
k) Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder.
The provisions of this Warrant are intended to be for the benefit of any permitted Holder from time to time of this Warrant and shall
be enforceable by such Holder or holder of Warrant Shares.
l) Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.
m) Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
n) Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
********************
(Signature Page Follows)
12
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.
Faraday Future Intelligent Electric Inc.
By:
Name:
Matthias Aydt
Title:
Co-Global Chief Executive Officer
13
NOTICE OF EXERCISE
To: faraday
future intelligent electric inc.
(1) The undersigned hereby elects
to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders
herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2) Payment shall take the form
of (check applicable box):
☐ in lawful money of the United
States; or
(3) Please issue said Warrant
Shares in the name of the undersigned or in such other name as is specified below:
The Warrant Shares shall be delivered to the following
DWAC Account Number:
_______________________________
_______________________________
_______________________________
[SIGNATURE
OF HOLDER]
Name of Investing Entity: ________________________________________________________________________
Signature of Authorized Signatory of Investing
Entity: _________________________________________________
Name of Authorized Signatory: ___________________________________________________________________
Title of Authorized Signatory: ____________________________________________________________________
Date: ________________________________________________________________________________________
14
ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, [____] all
of or [_______] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to _______________________________________________
whose address is _______________________________________________
Dated: ______________, _______
Holder’s Signature:
Holder’s Address:
NOTE: The signature to this Assignment Form must
correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever. Officers
of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the
foregoing Warrant.
15
EX-10.1 — AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT, DATED APRIL 14, 2026, BY AND BETWEEN FARADAY FUTURE INTELLIGENT ELECTRIC INC. AND THE INVESTOR
EX-10.1
Filename: ea028657901ex10-1.htm · Sequence: 4
Exhibit 10.1
AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT
DATED AS OF APRIL 14, 2026
BETWEEN
FARADAY FUTURE INTELLIGENT ELECTRIC INC.,
as the Issuer
and
GOLD KING ARTHUR HOLDING LIMITED
ANNEXES, EXHIBITS
AND SCHEDULES
ANNEX
Annex A
-
Definitions
SCHEDULES
Schedule 3.1
-
Existence, Organizational Identification Numbers, Foreign Qualification, Prior Names
Schedule 3.4
-
Capitalization
Schedule 3.6
-
Litigation
Schedule 3.7
-
Ownership of Property
Schedule 3.8
-
Labor Matters
Schedule 3.11
-
Taxes
Schedule 3.12
-
ERISA
Schedule 3.15
-
Real Estate
Schedule 3.16
-
Insurance
Schedule 3.17
-
Debt
Schedule 3.22
-
Listing and Maintenance Requirements
Schedule 8.6
-
Certain Related Transactions
ii
SECURITIES PURCHASE
AGREEMENT
This AMENDED AND RESTATED
SECURITIES PURCHASE AGREEMENT (the “Agreement”) dated as of April 14, 2026 (the “Signing Date”),
is by and between, FARADAY FUTURE INTELLIGENT ELECTRIC INC. (the “Issuer” or the “Company”),
and GOLD KING ARTHUR HOLDING LIMITED, (the “Purchaser”).
RECITALS:
WHEREAS,
the Company and the Purchaser previously entered into that certain securities purchase agreement, dated as of January 30, 2026 (the “Initial
Agreement”), pursuant to which the Company agreed to issue and the Purchaser agreed to purchase
an aggregate of $10 million of the Company’s Common Stock, at a Per Share Purchase Price equal to 100% of the closing price of the
shares of Common Stock on the Trading Day immediately prior to the Closing Date (as defined below).
WHEREAS,
the Company and the Purchaser desire to amend and restate in its entirety the Initial Agreement to, among other things (i) increase
the Subscription Amount from $10 million to $12 million, $500,000 of which will be used to purchase shares of Common Stock and $11.5 million
of which will be used to be purchase a to-be-designated series of the Company’s preferred stock, par value $0.0001 per share; (ii)
revise the Per Share Purchase Price, and (iii) remove the true-up provision set forth in Section 4.5 of the Initial Agreement in exchange
for the issuance by the Company of a common stock purchase warrant to the Purchaser.
WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act (as defined below)
and Regulation D promulgated thereunder, the Company desires to issue and sell to the Purchaser, and the Purchaser desires to purchase
from the Company, securities of the Company as more fully described in this Agreement.
NOW, THEREFORE, IN CONSIDERATION
of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are
hereby acknowledged, the Company and the Purchaser agree to amend and restate the Initial Agreement as follows:
ARTICLE
1
DEFINITIONS
Section 1.1 Certain
Defined Terms.
Capitalized terms used herein
and not otherwise defined herein shall have the meanings ascribed to such terms on Annex A to this Agreement.
Section 1.2 Accounting
Terms and Determinations.
Unless otherwise specified
herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder (including without limitation determinations
made pursuant to the exhibits hereto) shall be made, and all financial statements required to be delivered hereunder shall be prepared
on a consolidated basis in accordance with GAAP consistently applied. Notwithstanding any other provision contained herein, all terms
of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall
be made, without giving effect to any election under Accounting Standards Codification 825-10 (or any other Financial Accounting Standard
having a similar result or effect) to value any Indebtedness or other liabilities of the Issuer or any Subsidiary of the Issuer at “fair
value.”
Section 1.3 Other Definitional
Provisions and References.
References in this Agreement
to “Articles”, “Sections”, “Annexes”, “Exhibits” or “Schedules” shall be to
Articles, Sections, Annexes, Exhibits or Schedules of or to this Agreement unless otherwise specifically provided. Any term defined herein
may be used in the singular or plural. “Include”, “includes” and “including” shall be deemed to be
followed by “without limitation”. Except as otherwise specified or limited herein, references to any Person include the successors
and assigns of such Person. References “from” or “through” any date mean, unless otherwise specified, “from
and including” or “through and including”, respectively. Unless otherwise specified herein, the settlement of all payments
and fundings hereunder between or among the parties hereto shall be made in lawful money of the United States and in immediately available
funds. Time is of the essence for each performance obligation of the Issuer under this Agreement. All amounts used for purposes of financial
calculations required to be made herein shall be without duplication. References to any statute or act shall include all related current
regulations and all amendments and any successor statutes, acts and regulations. References to any statute or act, without additional
reference, shall be deemed to refer to federal statutes and acts of the United States. References to any agreement, instrument or document
shall include all schedules, exhibits, annexes and other attachments thereto. Unless otherwise expressly provided herein, references to
agreements and other contractual instruments, including this Agreement, shall be deemed to include all subsequent amendments thereto,
restatements and substitutions thereof and other modifications and supplements thereto which are in effect from time to time, but only
to the extent such amendments and other modifications are not prohibited by the terms hereof. References to any statute or regulation
may be made by using either the common or public name thereof or a specific cite reference and, except as otherwise provided with respect
to FATCA, are to be construed as including all statutory and regulatory provisions related thereto or consolidating, amending, replacing,
supplementing or interpreting the statute or regulation.
ARTICLE
2
PURCHASE AND SALE
Section 2.1 Closing.
(a) On
the Closing Date, upon the terms and subject to the conditions set forth herein, the Issuer agrees to sell, and the Purchaser agrees to
purchase from the Issuer, a number of shares of Common Stock and shares of Series C Preferred Stock, in each case, equal to the applicable
Subscription Amount indicated on the Purchaser’s signature page hereto divided by the Per Share Purchase Price, and the Warrant.
(b) The
Purchaser shall deliver to the Company, via wire transfer, immediately available funds equal to the Purchaser’s Subscription Amount
as set forth on the signature page hereto executed by the Purchaser shall be made available for Delivery Versus Payment (“DVP”)
settlement with the Company or its designees. The Company shall deliver to the Purchaser the Securities, and the Company and the Purchaser
shall deliver the other items set forth in Section 2.2 at the Closing. Upon satisfaction of the covenants and conditions set forth in
Sections 2.2 and 5.1, the Closing shall occur remotely via the exchange of documents and signatures or such other location as the parties
shall mutually agree. The settlement of the Shares shall occur via DVP (i.e., on the Closing Date, the Company shall issue the Shares
registered in the Purchaser’s name and address and released by the Transfer Agent directly to the account identified by the Purchaser.
Upon receipt of such Shares, the payment therefor shall promptly be made by wire transfer to the Company. The Purchaser’s aggregate
Subscription Amount is $12,002,191.78. The Issuer hereby acknowledges and agrees that the Subscription Amount has been fully funded and
satisfied as follows: (a) $10,000,000 in cash previously delivered to the Issuer via wire transfer, and (b) $2,002,191.78 via the immediate
cancellation and extinguishment of all outstanding principal and accrued interest under that certain Loan Agreement, dated as of April
10, 2026, by and between the Issuer and the Purchaser (the “Loan Agreement”). Upon execution of this Agreement, the
parties hereby acknowledge and agree that the Loan Agreement is hereby deemed terminated in its entirety and of no further force or effect.
2
(c) Notwithstanding
anything to the contrary herein, the Company shall not issue any Shares pursuant to this Agreement and the Purchaser shall
not have the obligation to purchase any Shares pursuant to this Agreement to the extent (but only to the extent) that after giving effect
to such purchase and sale, the aggregate number of shares of Common Stock issued to the Purchaser pursuant to this Agreement would exceed
the Maximum Percentage or otherwise exceed the aggregate number of shares of Common Stock which the Company may issue without breaching
the Company’s obligations under the rules and regulations of Nasdaq.
Section 2.2 Deliverables.
(a) On
or prior to the Closing Date, the Company shall deliver or cause to be delivered to the Purchaser the following:
(i) this
Agreement duly executed by the Company;
(ii) the
Warrant duly executed by the Company;
(iii) evidence
reasonably satisfactory to the Purchaser that the Series C COD has been filed with the Secretary of State of the State of Delaware and
the shares of Series C Convertible Preferred Stock to be purchased hereunder have been issued to the Purchaser on the books and records
of the Company;
(iv) a
legal opinion of Company Counsel;
(v) the
Company’s wire instructions, on Company letterhead and executed by the Company’s Co-Chief Executive Officer or Chief Financial
Officer;
(vi) a
copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver on an expedited basis via The Depository
Trust Company Deposit or Withdrawal at Custodian system (“DWAC”) the Purchaser’s shares of Common Stock to be
purchased hereunder, registered in the name of the Purchaser; and
(vii) a
Secretary’s Certificate, certifying that (i) knowledge of such individual, the representations and warrants of the Company in this
Agreement are true and correct in all material respects, as if made on and as of the date hereof and the Closing Date; (ii) each of the
Third Amended and restated Certificate of the Company, as amended from time to time, and the Certificate of Incorporation, Certificate
of Formation or Articles of Incorporation as applicable, for each Domestic Subsidiary, and all amendments thereto, as attached to such
certificate is true and complete, has not been modified and is in full force and effect as of the date hereof; (iii) the bylaws of the
Company and bylaws or operating agreements, as applicable of each Domestic Subsidiary, and all amendments thereto, are in full force and
effect as of the date hereof; (iv) that the resolutions of the Company’s board of directors relating to the Offering attached to
such certificate are in full force and effect and have not been modified; and (v) the good standings of the Company and each Domestic
Subsidiary, issued by the Secretary of the State of Delaware and California, as applicable, are true and correct.
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(b) On
or prior to the Closing Date, the Purchaser shall deliver or cause to be delivered to the Company the following:
(i) this
Agreement duly executed by such Purchaser; and
(ii) the
Purchaser’s Subscription Amount, which shall be made available for DVP settlement with the Company or its designees.
ARTICLE
3
REPRESENTATIONS AND WARRANTIES
To induce the Purchaser to
enter into this Agreement and to purchase the Securities and other transactions contemplated thereby, the Issuer hereby represents and
warrants to the Purchaser that the following are true, correct and complete as of the Signing Date, and after giving effect to the consummation
of the transactions contemplated by this Agreement will be, true, correct and complete as of the Closing Date:
Section 3.1 Existence
and Power.
The Issuer and each of its
Domestic Subsidiaries (a) is an entity duly organized, validly existing and in good standing (to the extent applicable in the relevant
jurisdiction) under the laws of its jurisdiction of incorporation, organization, or formation, which, with respect to the Issuer and each
such Domestic Subsidiary, in existence as of the Closing Date, is specified on Schedule 3.1, has the same legal name as it appears
in such Person’s Organizational Documents and an organizational identification number (if any), in each case as of the Closing Date
as specified on Schedule 3.1, and (b) has all powers and all governmental licenses, authorizations, registrations, permits, consents
and approvals required under all applicable Laws and required in order to carry on its business as now conducted (collectively, “Permits”),
except where the failure to have such Permits could not reasonably be expected to have a Material Adverse Effect. The Issuer and each
of its Domestic Subsidiaries is qualified to do business as a foreign entity in each jurisdiction in which it is required to be so qualified,
except where the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect. Except as set forth on
Schedule 3.1 or in the SEC Reports, neither the Issuer nor any of its Domestic Subsidiaries has had, over the five (5) year period
preceding the Closing Date, any name other than its current name or was incorporated or organized under the laws of any jurisdiction other
than its current jurisdiction of incorporation or organization. As of the Closing Date, except for the Subsidiaries set forth on Schedule
3.1 or in the SEC Reports, no Subsidiary exists.
Section 3.2 Organizational
Authority and Governmental Authorization; No Contravention.
The execution, delivery and
performance by the Issuer of this Agreement (a) are within its corporate powers, (b) have been duly authorized by all necessary action
pursuant to its Organizational Documents, (c) require no further approval, consent, exemption, authorization or other action by or in
respect of, or filing with, or notice to, any Governmental Authority with respect to any shares of Common Stock except for (i) the approvals,
consents, exemptions, authorizations, actions, notices and filings that have been duly obtained, taken, given or made and are in full
force and effect and (ii) those approvals, consents exemptions, authorization, actions, notices and filings, the failure of which to obtain
or make has not resulted in, or could not reasonably be expected, individually or in the aggregate to result in a Material Adverse Effect
and (d) do not violate, conflict with or cause a breach or a default under or a right of termination under (i) any of the Organizational
Documents of the Issuer and each of its Domestic Subsidiaries; or (ii) any applicable Law or any contract, agreement, lease or other instrument
binding upon it or its properties, except for such violations, conflicts, breaches or defaults or rights of termination as could not,
with respect to this clause (d)(ii), reasonably be expected to have a Material Adverse Effect.
4
Section 3.3 Binding
Effect.
This Agreement constitutes
a valid and binding agreement or instrument of the Issuer, enforceable against the Issuer in accordance with its respective terms, except
as the enforceability thereof may be limited by bankruptcy, insolvency or other similar laws relating to the enforcement of creditors’
rights generally and by general equitable principles.
Section 3.4 Capitalization.
The authorized and issued
and outstanding Capital Stock of each of the Issuer and each Domestic Subsidiary as of the Signing Date is as set forth on Schedule
3.4. Except as set forth on Schedule 3.4, all issued and outstanding Capital Stock of each such Person is duly authorized
and validly issued, fully paid, non-assessable (to the extent that such concepts apply to such Capital Stock), free and clear of all liens
and such Capital Stock was issued in compliance with all applicable laws. The identity of the holders of the Capital Stock of each Domestic
Subsidiary and the percentage of the fully diluted ownership of the Capital Stock of each such Person as of the Signing Date is set forth
on Schedule 3.4. Except as set forth on Schedule 3.4 or in the SEC Reports, as of the Signing Date there
are no preemptive or other outstanding rights, options, warrants, conversion rights or similar agreements or understandings for the purchase
or acquisition of the Issuer or any Domestic Subsidiary of any Capital Stock of any such Person.
Section 3.5 Financial
Information.
(a) Annual
Financial Statements. The historical annual financial statements of the Issuer and its Subsidiaries as of December 31, 2024, copies
of which have been delivered to the Purchaser (provided, that filing of such historical annual financials with the Commission shall
constitute delivery to the Purchaser), (i) were prepared substantially in accordance with GAAP consistently applied throughout the period
covered thereby, except as otherwise expressly noted therein; (ii) fairly present, in all material respects, the financial condition of
such Persons as of such date and their results of operations for the periods covered thereby in accordance with GAAP consistently applied
throughout the periods covered thereby, except as otherwise expressly noted therein; and (iii) show all material indebtedness and other
liabilities, direct or contingent, of such Persons as of such date, including liabilities for taxes, material commitments and Debt.
(b) Unaudited
Interim Financial Statements. The historical interim financial statement of the Issuer and its Subsidiaries as of March 31, 2025,
June 30, 2025, and September 30, 2025, copies of which have been delivered to the Purchaser (provided, that filing of such historical
interim financials with the Commission shall constitute delivery to the Purchaser), (i) were prepared substantially in accordance with
GAAP consistently applied throughout the periods covered thereby, except as otherwise expressly noted therein, and (ii) fairly present,
in all material respects, the financial condition of such Persons as of such date and their results of operations for the periods covered
thereby, subject, in the case of clauses (i) and (ii), to the absence of footnotes and to normal year-end audit adjustments and adjustments
for purchase accounting.
5
Any such historical financials
that the Issuer filed with the Commission via EDGAR shall be deemed to have been delivered to the Purchaser.
Section 3.6 Litigation.
Except as set forth on Schedule
3.6 or in the SEC Reports, there is no Litigation involving monetary damages in excess of $2,500,000 in the aggregate pending against,
or, to the knowledge of the Issuer or any of its Domestic Subsidiaries, threatened in writing against the Issuer, any of its Domestic
Subsidiaries or any of their respective properties.
Section 3.7 Ownership
of Property.
Except as set forth on Schedule
3.7 or in the SEC Reports, the Issuer and each of its Domestic Subsidiaries is the lawful owner of, has good and marketable title
to and is in lawful possession of, or has valid leasehold interests in, license to or right to use, all properties and other assets (except
for real property interests, which is covered in Schedule 3.15) reported by the Issuer or such Domestic Subsidiary to be owned
or leased (as the case may be) by such Person, except (i) for any such properties which are immaterial to the operations of the Issuer’s
or such Domestic Subsidiary’s respective business or (ii) as may have been disposed of in the Ordinary Course of Business or otherwise
in compliance with the terms hereof.
Section 3.8 Labor Matters.
There are no strikes or other
labor disputes pending or threatened against the Issuer or any of its Domestic Subsidiaries, which could reasonably be expected to have
a Material Adverse Effect. Since January 1, 2021, hours worked and payments made to the employees of the Issuer and each of its Domestic
Subsidiaries have not been in violation, in any material respect, of the Fair Labor Standards Act or any other applicable Law dealing
with such matters. All payments due from the Issuer and its Domestic Subsidiaries, or for which any claim may be made against any of them,
on account of wages and employee and retiree health and welfare insurance and other benefits have been paid or accrued as a liability
on their books, as the case may be, except as could not reasonably be expected to have a Material Adverse Effect. As of each Closing Date,
all pending strikes and material labor disputes related to any collective bargaining agreements to which the Issuer or any of its Domestic
Subsidiaries is a party are set forth on Schedule 3.8 or in the SEC Reports. All material payments due from the Issuer or any of
its Domestic Subsidiaries on account of (a) workers’ compensation, employee health plans, social security and welfare insurance
and employee income tax source deductions and vacation pay; and (b) the equivalent plans of those specified in subsection (a) in each
foreign (non-U.S.) jurisdiction where the Issuer or any such Domestic Subsidiary carries on business, in each case, have been paid in
full to date or accrued as a liability on the books of the Issuer and each such Domestic Subsidiary . Neither the Issuer nor any of its
Domestic Subsidiaries has any obligation under any collective bargaining agreement which would be reasonably expected to result in a Material
Adverse Effect. There is no material organizing activity involving the Issuer or any of its Domestic Subsidiaries by any labor union or
group of employees which would be expected to result in a Material Adverse Effect.
6
Section 3.9 Investment
Company.
Neither the Issuer nor any
of its Domestic Subsidiaries is an “investment company” or a company “controlled” by an “investment company”
or a “subsidiary” of an “investment company,” all within the meaning of the Investment Company Act of 1940. The
Issuer and its Domestic Subsidiaries are not subject to regulation under the Federal Power Act, the Interstate Commerce Act, any state
public utilities code, or any other federal or state statute, rule or regulation limiting its ability to incur Debt, or which may render
its obligations under this Agreement unenforceable.
Section 3.10 Compliance
With Laws; Anti-Terrorism Laws.
(a) Laws
Generally. The Issuer and each Domestic Subsidiary is in compliance with the requirements of all applicable Laws, except to the extent
such noncompliance could not reasonably be expected to have a Material Adverse Effect.
(b) Anti-Terrorism
Laws. Neither the Issuer nor any of its Domestic Subsidiaries, or, to the knowledge of the Issuer and its Domestic Subsidiaries, none
of their Affiliates (i) is in violation of any Anti-Terrorism Law, or (ii) is a Blocked Person, or is controlled by a Blocked Person.
Neither the Issuer nor any of its Domestic Subsidiaries, or, to the knowledge of the Issuer and its Domestic Subsidiaries, none of their
Affiliates, (A) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit
of any Blocked Person, or (B) deals in any property or interest in property blocked pursuant to Executive Order No. 13224, any similar
executive order or other Anti-Terrorism Law. No part of the proceeds from the issuance of the Shares will be used directly or, to the
knowledge of the Issuer and its Domestic Subsidiaries, indirectly for any payments to any government official or employee, political party,
official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain
or direct business or obtain any improper advantage, in violation of the FCPA or any other applicable Law dealing with such matters.
Section 3.11 Taxes.
Except as set forth on Schedule
3.11 or in the SEC Reports, all federal, state and foreign tax returns, reports and statements required to be filed by or on behalf
of the Issuer or any Domestic Subsidiary have been timely filed with the appropriate Governmental Authorities in each jurisdiction in
which such returns, reports and statements are required to be filed and, except to the extent subject to a Permitted Contest, all taxes
(including sales, employment and real property taxes) and other charges shown to be due and payable in respect thereof or otherwise due
from the Issuer or any Domestic Subsidiary in any material amount have been timely paid prior to the date on which any fine, penalty,
interest, late charge or loss may be added thereto for nonpayment thereof.
Section 3.12 Compliance
with ERISA; Foreign Benefit Plans.
(a) ERISA
Plans. Schedule 3.12 lists all Pension Plans and Multiemployer Plans of the Issuer and its Domestic Subsidiaries. Except as
could not reasonably be expected to have a Material Adverse Effect, each ERISA Plan (and the related trusts and funding agreements) complies
in form and in operation with, has been administered in material compliance with, and the terms of each ERISA Plan satisfies, the applicable
requirements of ERISA and the Code in all material respects. Each ERISA Plan which is intended to be qualified under Section 401(a) of
the Code is so qualified, and the United States Internal Revenue Service has issued a favorable determination letter with respect to each
such ERISA Plan which may be relied on currently. Neither the Issuer nor any of its Domestic Subsidiaries has incurred liability for any
material excise tax under any of Sections 4971 through 5000 of the Code.
7
(b) Pension
Plans and Multiemployer Plans. During the thirty-six (36) month period prior to the issuance of the Shares, (i) no steps have been
taken to terminate any Pension Plan and (ii) no failure to make contributions with respect to any Pension Plan sufficient to give rise
to a Lien under the Code has occurred. All amounts required by Code Sections 412 and 430 to be funded by the Issuer or any Domestic Subsidiary
or any member of a Controlled Group with respect to a Pension Plan have been made in compliance therewith. No condition exists or event
or transaction has occurred with respect to any Pension Plan which could result in the incurrence by the Issuer and Domestic Subsidiaries,
taken as a whole, of any liabilities, fines and penalties exceeding $500,000 (excluding, for the avoidance of doubt, current PBGC premiums
or other contributions required by ERISA or other applicable Law in the ordinary course). The Issuer and Domestic Subsidiaries, taken
as a whole, have not incurred liabilities exceeding $500,000 to the PBGC (other than for current premiums) with respect to any Pension
Plan. All contributions (if any) have been made on a timely basis to any Multiemployer Plan that are required to be made by the Issuer,
any of its Domestic Subsidiaries or any member of the Controlled Group under the terms of such plan, any collective bargaining agreement,
or by applicable Law. Neither the Issuer, any of its Domestic Subsidiaries nor any member of the Controlled Group (A) has withdrawn or
partially withdrawn from any Multiemployer Plan, (B) has incurred any withdrawal liability with respect to any such plan, or (C) has received
notice of any claim or demand for withdrawal liability or partial withdrawal liability from any such plan (in each case with respect to
which there is any unsatisfied withdrawal liability). No member of the Controlled Group has received any written notice that a Multiemployer
Plan is in reorganization or termination, that increased contributions may be required to avoid a reduction in plan benefits or the imposition
of any excise tax, that any such plan is or has been funded at a rate less than that required under Section 412 or Section 431 of the
Code, that any such plan is or may be terminated, or that any such plan is or is expected to become insolvent.
(c) With
respect to each program, plan or arrangement mandated by a government other than the United States providing for post-employment benefits
(each a “Foreign Government Benefit Plan”) and with respect to each employee benefit plan maintained or contributed
to by the Issuer or any Domestic Subsidiary that is not subject to Laws of the United States providing for post-employment benefits (each,
a “Foreign Plan”), to the Issuer’s and its Domestic Subsidiaries’ knowledge: (i) all employee and employee
contributions required by Law or by the terms of any Foreign Government Benefit Plan or any Foreign Plan have been made, or, if applicable,
accrued, in accordance with normal accounting practices, (ii) the liability of the Issuer or any Domestic Subsidiary with respect to a
Foreign Plan is reflected in accordance with normal accounting practices or the financial statements of the Issuer or such Domestic Subsidiary,
as the case may be and (iii) each Foreign Plan required to be registered has been registered and has been maintained in good standing
with applicable regulatory authorities unless in each case under the foregoing clauses (i), (ii) and (iii), the failure to do so could
not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
8
Section 3.13 Environmental
Compliance.
(a) Hazardous
Materials. No Hazardous Materials (i) are currently located on any properties owned, leased or operated by the Issuer or any Domestic
Subsidiary in violation of any Environmental Law, except for violations which could not reasonably be expected to have a Material Adverse
Effect, or (ii) have been released into the environment, or deposited, discharged, placed or disposed of at, on, under or near any of
such properties in a manner that would require the taking of any action by the Issuer or any Domestic Subsidiary under any Environmental
Law and have resulted in, or could reasonably be expected to result in, a Material Adverse Effect. No portion of any such property is
being used, or to the Issuer’s or its Domestic Subsidiaries’ knowledge, has been used at any previous time, for the disposal,
storage, treatment, processing or other handling of Hazardous Materials in material violation of any Environmental Law nor to the Issuer's
or its Domestic Subsidiaries’ knowledge is any such property affected by any Hazardous Materials Contamination, which in each case,
would reasonably be expected to result in a Material Adverse Effect. All written notifications of a release of Hazardous Materials required
to be filed by or on behalf of the Issuer or any Domestic Subsidiary under any applicable Environmental Law have been filed or are in
the process of being timely filed by or on behalf of the Issuer or Domestic Subsidiary, except where the failure to do so could not reasonably
be expected to have a Material Adverse Effect.
(b) Notices
Regarding Environmental Compliance. No written notice, notification, demand, request for information, citation, summons, complaint
or order has been issued, no complaint has been filed, no penalty has been assessed and no investigation or review is pending, or to the
Issuer’s or and its Domestic Subsidiaries’ knowledge, threatened by any Governmental Authority or other Person with respect
to any (i) alleged violation by the Issuer or any Domestic Subsidiary of any Environmental Law, (ii) alleged failure by the Issuer or
any such Domestic Subsidiary to have any Permits required in connection with the conduct of its business or to comply with the terms and
conditions thereof, (iii) any generation, treatment, storage, recycling, transportation or disposal of any Hazardous Materials or (iv)
release of Hazardous Materials, except in each case of the foregoing to the extent as would not reasonably be expected to have a Material
Adverse Effect.
(c) Properties
Requiring Remediation. No property now owned or leased by the Issuer or any Domestic Subsidiary and, to the Issuer’s or its
Domestic Subsidiaries’ knowledge, no such property previously owned or leased by the Issuer or any such Domestic Subsidiary, to
which the Issuer or any such Domestic Subsidiary has, directly or indirectly, transported or arranged for the transportation of any Hazardous
Materials, is listed or, to the Issuer’s or any of its Domestic Subsidiaries’ knowledge, proposed for listing, on the National
Priorities List promulgated pursuant to SEMS or any state list or is the subject of federal, state or local enforcement actions or other
investigations which may lead to claims against the Issuer or any such Domestic Subsidiary for clean-up costs, remedial work, damage to
natural resources or personal injury claims, including, but not limited to, claims under CERCLA or RCRA, except, in each case of the foregoing,
to the extent as would not reasonably be expected to have a Material Adverse Effect.
(d) Underground
Storage Tanks. Neither the Issuer nor any of its Domestic Subsidiaries operates any underground storage tanks on any property owned
or leased by the Issuer or any Domestic Subsidiary that are not registered or permitted in accordance with applicable Environmental Laws
or that the Issuer or any of its Domestic Subsidiaries is required to monitor, maintain, retrofit, upgrade, investigate, abate, remediate
or remove under Environmental Law, except to the extent as could not reasonably be expected to have a Material Adverse Effect.
(e) Environmental
Liens. No Liens exist under or pursuant to any applicable Environmental Laws on any real property or other assets owned by the Issuer
or any Domestic Subsidiary, and to the Issuer’s or any of its Domestic Subsidiaries’ knowledge no actions by any Governmental
Authority have been taken or are in process which could subject any of such properties or assets to such Liens, except to the extent as
could not reasonably be expected to have a Material Adverse Effect.
9
Section 3.14 Intellectual
Property.
The Issuer and each Domestic
Subsidiary owns, is licensed to use or otherwise has the right to use, all Intellectual Property Rights that are material to the business
or operations of the Issuer or such Domestic Subsidiary as currently conducted.
Section 3.15 Real Property
Interests.
Except as set forth on Schedule
3.15 or in the SEC Reports, neither the Issuer nor any Domestic Subsidiary has any ownership, leasehold or other possessory interest
in real property. Schedule 3.15 sets forth, with respect to each parcel of real estate owned or leased by the Issuer or any Domestic
Subsidiary, the street address of each such parcel.
Section 3.16 Insurance.
Except as set forth on Schedule 3.16 or in the SEC Reports, the Issuer does not maintain any other insurance policies.
Section 3.17 Debt.
Set forth on Schedule 3.17
or in the SEC Reports is a true and complete list of all Debt of the Issuer and such Schedule accurately sets forth the aggregate principal
amount of such Debt as of the Signing Date.
Section 3.18 Material
Non-Public Information. All material non-public information regarding the Issuer or any Domestic Subsidiary that has been disclosed
to the Purchaser on or prior to the date hereof, has been disclosed, or will be disclosed, in the 8-K filing to be made by the Issuer
prior to the commencement of trading on the first Trading Day following the date hereof.
Section 3.19 Private
Offering. Assuming the accuracy of the Purchaser’s representations and warranties contained in Article 8, no registration
of the Securities pursuant to the provisions of the Securities Act or state securities or “blue sky” laws will be required
for the offer, sale or issuance of the Securities by the Issuer to the Purchaser pursuant to this Agreement.
Section 3.20 Sanctions;
Anti-Corruption.
(a) Neither
the Issuer nor any of its Domestic Subsidiaries, nor, to the knowledge of the Issuer or any Domestic Subsidiary, any employee, agent,
or affiliate of the Issuer or any of its Domestic Subsidiaries is an individual or entity that is, or is owned or controlled by persons
that are: (i) the subject of any sanctions administered or enforced by OFAC, the U.S. Department of State, the United Nations Security
Council, the European Union, the Government of Canada, Her Majesty’s Treasury, or other relevant sanctions authority (collectively,
“Sanctions”), or (ii) located, organized or resident in a country or territory that is, or whose government is, the
subject of Sanctions (including Crimea, Cuba, Iran, North Korea and Syria).
(b) The
Issuer, its Domestic Subsidiaries and their respective directors and officers and, to the knowledge of the Issuer and any Domestic Subsidiary,
any employees and the agents of the Issuer and its Domestic Subsidiaries, are in compliance with all applicable Sanctions and with the
FCPA and any other applicable anti-corruption law. The Issuer and their Domestic Subsidiaries have instituted and maintain policies and
procedures designed to ensure continued compliance with applicable Sanctions, the FCPA, and any other applicable anti-corruption laws.
10
Section 3.21 Issuance
of the Securities. The Warrant has been duly authorized and, when issued and paid for in accordance herewith and therewith, will
constitute a valid and binding obligation of the Issuer, enforceable against the Issuer in accordance with the terms therein, except
as enforcement thereof may be limited by applicable laws relating to bankruptcy, insolvency, fraudulent conveyance and other similar
laws and by general equitable principles. The issuance of the Underlying Shares and the shares of Series C Convertible Preferred Stock
issuable to the Purchaser hereunder have been duly authorized and when issued in accordance with the terms of the Transaction Documents,
will be validly issued, fully paid and nonassessable, free and clear of all liens imposed by the Issuer other than restrictions on transfer
provided for in the Transaction Documents.
Section 3.22 Listing
and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Issuer
has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common
Stock under the Exchange Act nor has the Issuer received any notification that the Commission is contemplating terminating such registration.
Except as set forth on Schedule 3.22 or in the SEC Reports, the Issuer is, and has no reason to believe that it will not in the
foreseeable future continue to be, in compliance with all such listing and maintenance requirements. The Common Stock is currently eligible
for electronic transfer through The Depository Trust Company or another established clearing corporation and the Issuer is current in
payment of the fees to the Depository Trust Company (or such other established clearing corporation) in connection with such electronic
transfer.
Section 3.23 No Integrated
Offering. Assuming the accuracy of the Purchaser’s representations and warranties set forth in Article 8, neither the
Issuer, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales
of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to
be integrated with prior offerings by the Issuer for purposes of (i) the Securities Act which would require the registration of any such
securities under the Securities Act, or (ii) any applicable stockholder approval provisions of Nasdaq on which any of the securities
of the Issuer are listed or designated.
Section 3.24 Acknowledgment
Regarding Purchaser’s Purchase of Securities. The Issuer acknowledges and agrees that the Purchaser is acting solely in the
capacity of an arm’s length purchaser with respect to this Agreement and the transactions contemplated hereby. The Issuer further
acknowledges that the Purchaser is not acting as a financial advisor or fiduciary of the Issuer (or in any similar capacity) with respect
to this Agreement and the transactions contemplated hereby and any advice given by the Purchaser or any of its respective representatives
or agents in connection with this Agreement and the transactions contemplated hereby is merely incidental to the Purchaser’s purchase
of the Securities. The Issuer further represents to the Purchaser that the Issuer’s decision to enter into this Agreement has been
based solely on the independent evaluation of the transactions contemplated hereby by the Issuer and its representatives.
11
Section 3.25 Acknowledgment
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding, it
is understood and acknowledged by the Issuer that: (i) the Purchaser has not been asked by the Issuer to agree, nor has the Purchaser
agreed, to desist from purchasing or selling, long and/or short, securities of the Issuer, or “derivative” securities based
on securities issued by the Issuer or to hold the Securities for any specified term, (ii) past or future open market or other transactions
by the Purchaser, specifically including, without limitation, Short Sales or “derivative” transactions, before or after the
closing of this or future private placement transactions, may negatively impact the market price of the Issuer’s publicly-traded
securities, (iii) the Purchaser, and counter-parties in “derivative” transactions to which the Purchaser is a party, directly
or indirectly, may presently have a “short” position in the Common Stock and (iv) the Purchaser shall not be deemed to have
any affiliation with or control over any arm’s length counter-party in any “derivative” transaction by virtue of this
Agreement.
Section 3.26 Regulation
M Compliance. The Issuer has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action
designed to cause or to result in the stabilization or manipulation of the price of any security of the Issuer to facilitate the sale
or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities,
or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Issuer.
Section 3.27 Compliance
with PRC Oversea Investment and Listing Rules and Regulations. Except as otherwise disclosed in Schedule 3.27, the Company
and Subsidiaries have taken reasonable steps to cause the Company’s shareholders, directors and officers that is, or directly or
indirectly controlled by, a PRC resident or citizen, to comply with any applicable rules and regulations of relevant PRC government agencies
(including but not limited to the Ministry of Commerce, the National Development and Reform Commission, the China Securities Regulatory
Commission (“CSRC”), and the State Administration of Foreign Exchange (“SAFE”) relating to such
persons’ shareholding with the Company (collectively, the “PRC Oversea Investment and Listing Rules and Regulations”),
including, without limitation, taking reasonable steps to require each such person that is, or is directly or indirectly owned or controlled
by, a PRC resident or citizen to complete any registration, to timely report material changes, and other procedures required under any
applicable PRC Oversea Investment and Listing Rules and Regulations.
ARTICLE
4
AFFIRMATIVE COVENANTS
Until such time as the Purchaser
no longer holds any Securities, the Issuer agrees:
Section 4.1 Transfer
Restrictions.
(a) The
Securities and the Underlying Shares may only be disposed of in compliance with state and federal securities laws. In connection with
any transfer of the Securities and the Underlying Shares other than pursuant to an effective registration statement or Rule 144 (defined
below), to the Company or to an Affiliate of the Purchaser without payment of consideration therefor or in connection with a pledge as
contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion of counsel
selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory
to the Company, to the effect that such transfer does not require registration of such transferred Securities or Underlying Shares under
the Securities Act.
(b) The
Purchaser agrees to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Securities and the Underlying
Shares in substantially the following form:
[THE SHARES HAVE
NOT BEEN][NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES
ARE CONVERTIBLE HAVE NOT BEEN] REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES LAWS. THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR
OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT
OR OTHER LOAN SECURED BY THE SECURITIES.
12
The Company acknowledges
and agrees that the Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or
grant a security interest in some or all of the Shares or shares of Series C Convertible Preferred Stock to a financial institution or,
in connection with a bona fide pledge, other Person that is an “accredited investor” as defined in Rule 501(a) under the Securities
Act and, if required under the terms of such arrangement, the Purchaser may transfer pledged or secured Shares or shares of Series C Convertible
Preferred Stock to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company and no legal
opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice shall
be required of such pledge. At the Purchaser’s expense, the Company will execute and deliver such reasonable documentation as a
pledgee or secured party of Shares or shares of Series C Convertible Preferred Stock may reasonably request in connection with a pledge
or transfer of the Shares or shares of Series C Convertible Preferred Stock, including, if the Shares or shares of Series C Convertible
Preferred Stock are subject to registration pursuant to Section 4.19 of this Agreement, the preparation and filing of any required
prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable provision of the Securities Act to appropriately
amend the list of selling stockholders thereunder.
(c) Subject
to the remainder of this paragraph, legends (including the legend set forth in Section 4.1(b) hereof) on certificates evidencing
the Shares and the shares of Series C Convertible Preferred Stock may be removed: (i) following any sale of the Shares or the shares of
Series C Convertible Preferred Stock pursuant to a registration statement (including the Registration Statement (defined below)) covering
the resale of the Shares and the shares of Series C Convertible Preferred Stock that is effective and usable under the Securities Act,
(ii) following any sale of the Shares pursuant to Rule 144, (iii) if requested by any holder who is not an affiliate of the Company under
Rule 144, if the Shares or the shares of Series C Convertible Preferred Stock have been held for over a year (after giving effect to any
“tacking” of the Purchaser’s holding period of the Shares that may be permissible under Rule 144, such as may be available
in the case of cashless exercises) and are eligible for sale under Rule 144, or (iv) if such legend is not required under applicable requirements
of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission). Upon the occurrence
of any of the events set forth in clauses (i), (ii) or (iii) in the preceding sentence, the Company shall cause its counsel to issue a
legal opinion and an instruction letter to the Transfer Agent or the Purchaser reasonably promptly after request by the Purchaser, if
required by the Transfer Agent, to effect the removal of the legend hereunder, conditioned upon the prior completion and submission by
the Purchaser or its broker, as applicable, of customary certificates or representation letters. The Company agrees that following such
time as such legend is no longer required under this Section 4.1(d), the Company will, no later than the later of (i) one (1) Trading
Day and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined below) following the delivery by the Purchaser
to the Company or the Transfer Agent of a certificate representing the Shares, as the case may be, issued with a restrictive legend together
with any customary certificate or representation letter from the Purchaser or the Purchaser’s broker, as applicable (such date when
all such conditions are satisfied, the “Legend Removal Date”), deliver or cause to be delivered to the Transfer Agent
an instruction letter with respect to the removal of legends, if required by the Transfer Agent. The Company may not make any notation
on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section 4.1.
Certificates for Shares subject to legend removal hereunder shall be transmitted by the Transfer Agent to the Purchaser by crediting the
account of the Purchaser’s prime broker with the Depository Trust Company System as directed by the Purchaser. As used herein, “Standard
Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on Nasdaq with respect to the
Common Stock as in effect on the date of delivery of a certificate representing Shares or shares of Series C Convertible Preferred Stock
issued with a restrictive legend.
(d) The
Purchaser agrees with the Company that the Purchaser will sell any Securities or Underlying Shares pursuant to either the registration
requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if
the Securities or Underlying Shares are sold pursuant to a Registration Statement, they will be sold in compliance with the plan of distribution
set forth therein, and acknowledges that the removal of the restrictive legend from certificates representing Securities or Underlying
Shares as set forth in this Section 4.1 is predicated upon the Company’s reliance upon this understanding.
13
Section 4.2 Compliance
with Laws.
The Issuer will comply, and
cause each Subsidiary to comply, with the requirements of all applicable Laws, except to the extent that failure to so comply could not
reasonably be expected to have a Material Adverse Effect.
Section 4.3 Use of
Proceeds.
(a) The
Issuer will use the proceeds from the issuance of Securities solely (a) to pay transaction fees and expenses incurred in connection with
the consummation of the transactions contemplated by this Agreement and (b) for general working capital purposes and other corporate purposes.
(b) Without
limiting the generality of Section 4.3(a) above, the Issuer does not intend to use nor shall it use any portion of the proceeds
of the issuance of Securities, directly or, to the Issuer’s knowledge, indirectly, for any purpose in violation of the Trading with
the Enemy Act or to purchase or carry, or to reduce or refinance any Debt incurred to purchase or carry, any margin stock (as defined
in Regulation U of the Board of Governors of the Federal Reserve System) or for any related purpose governed by Regulations T, U or X
of the Board of Governors of the Federal Reserve System.
Section 4.4 Sanctions;
Anti-Corruption Laws.
The Issuer will maintain in
effect policies and procedures designed to promote compliance by the Issuer and its Subsidiaries, and their respective directors, officers,
employees, and agents with applicable Sanctions and with the FCPA and any other applicable anti-corruption laws.
Section 4.5 Reserved.
Section 4.6 Registration
Statement.
(a) The
Issuer shall use commercially reasonable efforts to file a registration statement (the “Registration Statement” and
the date of such filing, the “Filing Date”) within sixty (60) days after the Closing Date, on the appropriate form
providing for the resale by the Purchaser of the Shares (excluding, for the avoidance of doubt, the Warrant Shares). The Issuer shall
use commercially reasonable efforts to cause such Registration Statement to become effective within forty-five (45) days following the
Filing Date of the Registration Statement, and to keep such Registration Statement effective at all times until no Purchaser owns any
Shares issued hereof.
(b) If
after the date hereof but prior to the date the Registration Statement is declared effective, the Issuer enters into an agreement (each,
an “MFN Agreement”), pursuant to which the signatory party thereto has the right to receive cash and/or securities
of the Issuer in the event that a registration statement registering for resale by such signatory the securities of the Issuer issued
to such signatory pursuant to such MFN Agreement is not timely filed, the Issuer and the Purchaser shall amend this Agreement such that
the Purchaser shall have the right to receive cash and/or shares of Common Stock in the manner set forth in such MFN Agreement, in the
event the Registration Statement is not filed on or prior to the Filing Date. Notwithstanding anything to the contrary herein, in no event
shall the Issuer issue to the Purchaser any securities of the Issuer pursuant to this Section 4.6(b) which, when issued, would otherwise
cause the Aggregate Share Issuance to exceed the Maximum Percentage.
Section 4.7 Furnishing
of Information; Public Information.
(a) The
Issuer covenants to use commercially reasonable efforts to maintain the registration of the Common Stock under Section 12(b) or 12(g)
of the Exchange Act and to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports
required to be filed by the Issuer after the date hereof pursuant to the Exchange Act even if the Issuer is not then subject to the reporting
requirements of the Exchange Act.
14
Section 4.8 Securities
Laws Disclosure; Publicity. The Issuer shall, on or prior to 5:30 p.m., Eastern Time, before the fourth (4th) Trading
Day following the date hereof, file a Current Report on Form 8-K, including this Agreement as the exhibit thereto, with the Commission.
In addition, effective upon the filing of such Current Report on Form 8-K, the Issuer acknowledges and agrees that any and all confidentiality
or similar obligations under any agreement, whether written or oral, between the Issuer, any of its Subsidiaries or any of their respective
officers, directors, agents, employees, Affiliates or agents, on the one hand, and the Purchaser or any of its Affiliates on the other
hand, shall terminate and be of no further force or effect. The Issuer understands and confirms that the Purchaser shall be relying on
the foregoing covenant in effecting transactions in securities of the Issuer. The Issuer and the Purchaser shall consult with each other
in issuing any press releases with respect to the transactions contemplated hereby, and neither the Issuer nor the Purchaser shall issue
any such press release nor otherwise make any such public statement without the prior consent of the Issuer, with respect to any press
release of the Purchaser, or without the prior consent of the Purchaser, with respect to any press release of the Issuer, which consent
shall not unreasonably be withheld or delayed, except if such disclosure is required by law or requested by a governmental authority
or self-regulatory organization, in which case the disclosing party shall promptly provide the other party with prior notice of such
public statement or communication. Notwithstanding the foregoing, the Issuer shall not publicly disclose the name of the Purchaser, or
include the name of any Purchaser in any filing with the Commission or any regulatory agency or Nasdaq, without the prior written consent
of the Purchaser, except (a) as required by federal securities law in connection with (i) any registration statement under the Securities
Act and (ii) the filing of this Agreement with the Commission and (b) to the extent such disclosure is required by law or Nasdaq rules
and regulations or requested by a governmental authority or self-regulatory organization, in which case the Issuer shall provide the
Purchaser with prior notice of such disclosure permitted under this clause (b) and reasonably cooperate with the Purchaser regarding
such disclosure.
Section 4.9 Shareholder
Rights Plan. No claim will be made or enforced by the Issuer or, with the consent of the Issuer, any other Person, that the Purchaser
is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution
under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Issuer, or that the Purchaser
could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under this Agreement or
under any other agreement between the Issuer and the Purchaser.
Section 4.10 [Reserved].
Section 4.11 Listing
of Securities. The Issuer shall, if applicable: (i) in the time and manner required by Nasdaq, prepare and file with Nasdaq an additional
shares listing application covering the Shares, and (ii) use commercially reasonable efforts to take all steps necessary to cause the
Shares to be approved for listing or quotation on Nasdaq as soon as possible thereafter. The Issuer agrees to use commercially reasonable
efforts to maintain the eligibility of the Common Stock for electronic transfer through the Depository Trust Company or another established
clearing corporation, including, without limitation, by timely payment of fees to The Depository Trust Company or such other established
clearing corporation in connection with such electronic transfer.
Section 4.12 Certain
Transactions and Confidentiality. The Purchaser covenants that neither it, nor any Affiliate acting on its behalf or pursuant to
any understanding with it will execute any purchases or sales, including Short Sales, of any of the Issuer’s securities during
the period commencing with the execution of this Agreement and ending at such time that the transactions contemplated by this Agreement
are first publicly announced pursuant to the filing of the Current Report on Form 8-K as described in Section 4.8. The Purchaser
covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Issuer pursuant to the
filing of the Current Report on Form 8-K as described in Section 4.8, such Purchaser will maintain the confidentiality of the
existence and terms of this transaction and the information included in the Disclosure Schedules (other than as disclosed to its legal
and other representatives). Notwithstanding the foregoing, and subject to anything contained in this Agreement to the contrary including
Section 4.1 and Section 4.13, the Issuer expressly acknowledges and agrees that (i) no Purchaser makes any representation,
warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Issuer after the time that the
transactions contemplated by this Agreement are first publicly announced pursuant to the filing of the Current Report on Form 8-K as
described in Section 4.8, (ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any securities
of the Issuer in accordance with applicable securities laws from and after the time that the transactions contemplated by this Agreement
are first publicly announced pursuant to the filing of the Current Report on Form 8-K as described in Section 4.8 and (iii) no
Purchaser shall have any duty of confidentiality or duty not to trade in the securities of the Issuer to the Issuer, any of its Subsidiaries,
or any of their respective officers, directors, employees, Affiliates or agent, after the issuance of the filing of the Current Report
on Form 8-K as described in Section 4.8.
15
Section 4.13 Blue Sky
Filings. The Issuer shall take such action as the Issuer shall reasonably determine is necessary in order to obtain an exemption
for, or to qualify the Shares for, sale to the Purchaser at the Closing under applicable securities or “Blue Sky” laws of
the states of the United States, and shall provide evidence of such actions promptly upon request of any Purchaser.
ARTICLE
5
CONDITIONS
Section 5.1 Conditions
to Closing.
The obligation of the Purchaser
under Section 2.1(a) to purchase the Shares and shares of Series C Convertible Preferred Stock hereunder shall be subject to the
receipt by the Purchaser of each agreement, document and instrument set forth in Section 2.2 and to the satisfaction of the following
conditions precedent, each in form and substance reasonably satisfactory to, and to the satisfaction of, the Purchaser:
(a) the
representations and warranties contained in this Agreement are true and correct in all material respects (without duplication of any materiality
qualifier) as of the Closing Date, both before and after giving effect to the transactions contemplated by this Agreement;
(b) receipt
of a customary legal opinion of Pryor Cashman LLP, as special counsel to the Issuer; and
(c) receipt
of all customary resolutions or written consents of the Issuer’s board of directors approving and authorizing the transactions contemplated
hereby.
For purposes of determining
whether the conditions specified in this Section 5.1 have been satisfied, by funding amounts for the purchase of the Shares hereunder
at the Closing, the Purchaser shall be deemed to have consented to, approved or accepted, or to be satisfied with, each document or other
matter required hereunder to be consented to or approved by or acceptable or satisfactory to the Purchaser.
ARTICLE
6
EXPENSES AND INDEMNITY
Section 6.1 Fees and
Expenses.
Except as expressly set forth
in this Agreement to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts,
if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of
this Agreement. Notwithstanding the foregoing, the Company shall reimburse the Purchaser for up to $100,000 of bona fide, reasonable and
documented, out-of-pocket costs and expenses incurred by it in connection with the structuring, documentation, negotiation and closing
of the transactions contemplated by this Agreement, which amount has been reimbursed to the Purchaser by the Company prior to the date
hereof. The Company shall pay all Transfer Agent fees. The Company shall pay any issuance, stamp or documentary taxes (other than transfer
taxes) or charges imposed by any governmental body, agency or official (other than income taxes) by reason of the issuance of the Shares
to the Purchaser.
16
Section 6.2 Indemnity.
The Company will indemnify
and hold the Purchaser and its directors, officers, stockholders, members, partners, employees and agents (and any other Persons with
a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who
controls the Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors,
officers, stockholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person
holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser
Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including
all judgments, amounts paid in settlements, court costs and reasonable and documented attorneys’ fees and costs of investigation
that any such Purchaser Party may suffer or incur caused by or based upon (a) any material breach of any of the representations or warranties
made by the Company in this Agreement or (b) any action instituted against a Purchaser Party in any capacity, or any of them or their
respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser Party, with respect to the transactions
contemplated hereby (except to the extent such action is solely based upon a material breach of such Purchaser Party’s representations,
warranties or covenants under this Agreement or any agreements or understandings such Purchaser Party may have with any such stockholder
or any violations by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party that is finally judicially
determined to constitute fraud, gross negligence or willful misconduct). If any action shall be brought against any Purchaser Party in
respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing,
and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser
Party. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (x) the employment
thereof has been specifically authorized by the Company in writing, (y) the Company has failed after a reasonable period of time to assume
such defense and to employ counsel or (z) in such action there is, in the reasonable opinion of counsel to the applicable Purchaser Party,
a material conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case
the Company shall be responsible for the reasonable and documented fees and expenses of no more than one such separate counsel. The Company
will not be liable to any Purchaser Party under this Agreement (1) for any settlement by a Purchaser Party effected without the Company’s
prior written consent, which shall not be unreasonably withheld or delayed; or (2) to the extent, but only to the extent that a loss,
claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants
or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents. The indemnification required by this
Section 6.2 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and
when bills are received or are incurred; provided, that if any Purchaser Party is finally judicially determined not to be entitled to
indemnification or payment under this Section 6.2, such Purchaser Party shall promptly reimburse the Company for any payments that
are advanced under this sentence. The indemnity agreements contained herein shall be in addition to any cause of action or similar right
of any Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to law.
ARTICLE
7
MISCELLANEOUS
Section 7.1 Survival.
The representations and warranties
contained herein shall survive the Closing and the delivery of the Securities for a period of three (3) years from the Closing.
Section 7.2 No Waivers;
Remedies Cumulative.
No failure or delay by the
Purchaser in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and
remedies herein and therein provided shall be cumulative and not exclusive of any rights or remedies provided by Law.
17
Section 7.3 Notices.
(a) All
notices, requests and other communications to any party hereunder shall be in writing (including prepaid overnight courier, facsimile
transmission, e-mail, electronic submissions or similar writing, but in no event by text message) and shall be given to such party at
its address, facsimile number or e-mail address set forth on the signature pages hereof (or, in the case of a party who becomes the Purchaser
after the date hereof, in an Assignment Agreement or in a notice delivered to the Issuer by the assignee Purchaser forthwith upon such
assignment) or by electronic submissions, as provided below, or at such other address, facsimile number or e-mail address as such party
may hereafter specify for the purpose by notice to the Issuer; provided, that notices, requests or other communications shall be
permitted by e-mail or other electronic submissions (but in no event by text message) only in accordance with the provisions of Section
7.3(b). Each such notice, request or other communication shall be effective (i) if given by facsimile, when such notice is transmitted
to the facsimile number specified by this Section and the sender receives a confirmation of transmission from the sending facsimile machine,
(ii) if given by e-mail or other electronic submissions, as set forth in Section 7.3(c) or (iii) if given by mail, prepaid overnight
courier or any other means, when received at the applicable address specified by this Section.
(b) Notices
and other communications to the parties hereto may be delivered or furnished by electronic communication (including e-mail and Internet
or intranet websites, but in no event by text message); provided, that the foregoing shall not apply to notices sent directly to
any party hereto if such party has notified the other parties in writing that it has elected not to receive notices by electronic communication
(which election may be limited to particular notices).
(c) (i)
Notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgment
from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written
acknowledgment), and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed
receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication
is available and identifying the website address therefor, provided, that if any such notice or other communication is not sent
or posted during normal business hours, such notice or communication shall be deemed to have been sent at the opening of business on the
next Business Day.
Section 7.4 Severability.
In case any provision of or
obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability
of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected
or impaired thereby.
Section 7.5 Amendments
and Waivers.
No provision of this Agreement
may be amended, waived or otherwise modified unless such amendment, waiver or other modification is in writing and is signed or otherwise
approved by the Issuer and the Purchaser. Any waiver of any provision of this Agreement shall be effective only in the specific instance
and for the specific purpose for which it is given. No delay on the part of the Purchaser in the exercise of any right, power or remedy
shall operate as a waiver thereof, nor shall any single or partial exercise by the Purchaser of any right, power or remedy preclude other
or further exercise thereof, or the exercise of any other right, power or remedy.
18
Section 7.6 Headings.
Headings and captions used
in this Agreement (including the Exhibits, Schedules and Annexes hereto) are included for convenience of reference only and shall not
be given any substantive effect.
Section 7.7 Waiver
of Consequential and Other Damages.
To the fullest extent permitted
by applicable Law, the Issuer shall not assert, and the Issuer hereby waives, any claim against any Purchaser Party, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of this Agreement, or any agreement or instrument contemplated hereby or thereby, the transactions contemplated hereby
or thereby, or the use of the proceeds thereof. No Purchaser Party shall be liable for any damages arising from the use by unintended
recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission
systems in connection with this Agreement or the transactions contemplated hereby or thereby.
Section 7.8 GOVERNING
LAW; SUBMISSION TO JURISDICTION.
THIS AGREEMENT, AND ALL
MATTERS RELATING HERETO OR THERETO OR ARISING THEREFROM (WHETHER SOUNDING IN CONTRACT LAW, TORT LAW OR OTHERWISE), SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
EACH PARTY HERETO HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN NEW YORK CITY, STATE OF NEW YORK AND
IRREVOCABLY AGREES THAT, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE LITIGATED IN SUCH COURTS. EACH
PARTY HERETO EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS.
EACH PARTY HERETO HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON SUCH
PARTY BY CERTIFIED OR REGISTERED MAIL, ADDRESSED TO SUCH PARTY AT THE ADDRESS SET FORTH IN OR IN ACCORDANCE WITH THIS AGREEMENT AND SERVICE
SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.
Section 7.9 WAIVER
OF JURY TRIAL.
THE ISSUER AND THE PURCHASER
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
THE ISSUER AND THE PURCHASER ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT IT HAS
RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT IT WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS.
THE ISSUER AND THE PURCHASER WARRANTS AND REPRESENTS THAT IT HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL,
AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.
19
Section 7.10 Counterparts;
Signatures; Integration.
This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon
the same instrument. Signatures by facsimile or other electronic communication shall bind the parties to the same extent as would a manually
executed counterpart. This Agreement constitute the entire agreement and understanding among the parties hereto and supersede any and
all prior agreements and understandings, oral or written, relating to the subject matter hereof.
Section 7.11 No Strict
Construction.
The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this Agreement.
Section 7.12 USA PATRIOT
Act Notification.
The Purchaser hereby notifies
the Issuer that pursuant to the requirements of the USA PATRIOT Act, it is required to obtain, verify and record certain information and
documentation that identifies the Issuer, which information includes the name and address of the Issuer and such other information that
will allow the Purchaser, as applicable, to identify the Issuer in accordance with the USA PATRIOT Act.
ARTICLE
8
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents
and warrants as follows:
Section 8.1 Authorization;
No Contravention.
The execution, delivery and
performance by the Purchaser of this Agreement: (a) is within its power and authority and has been duly authorized by all necessary action;
(b) does not contravene the terms of its Organizational Documents or any amendment thereof; and (c) will not violate, conflict with or
result in any breach or contravention of any of its contractual obligations, or any order or decree directly relating to it.
Section 8.2 Binding
Effect.
This Agreement has been duly
executed and delivered by the Purchaser and constitutes its legal, valid and binding obligation, enforceable against it in accordance
with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement
of creditors’ rights generally or by equitable principles relating to enforceability.
20
Section 8.3 No Legal
Bar.
The execution, delivery and
performance of this Agreement by the Purchaser will not violate any requirement of Law applicable to it.
Section 8.4 Securities
Laws.
(a) The
Securities are being or will be acquired by the Purchaser hereunder for the purpose of investment for its own account, not as a nominee
or agent, and not with the view to, or for resale in connection with, any distribution thereof in any transaction which would be in violation
of the Securities Act or state securities laws or which would require the issuance and sale of the Securities hereunder to be registered
under the Securities Act, subject, however, to the disposition of the Purchaser’s property being at all times within its control.
The Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the Securities and Underlying
Shares in violation of the Securities Act. The Purchaser does not have any agreement or understanding, whether or not legally binding,
direct or indirect, with any other Person to sell or otherwise distribute the securities to be issued to it hereunder.
(b) The
Purchaser is an “accredited investor” as (as defined in Rule 144A under the Securities Act of 1933 as amended (the “Securities
Act”)), or (2) an institutional “accredited investor” (as described in Rule 501(a)(1), (2), (3) or (7) of Regulation
D promulgated under the Securities Act) with such knowledge and experience in financial and business matters as are necessary in order
to evaluate the merits and risks of an investment in the Shares, and understands that the offer and sale of the Shares meets the exemptions
from filing under FINRA Rule 5123(b)(1)(C) or (J); and (i) the Purchaser (1) is an institutional account as defined in FINRA Rule 4512(c),
(2) is a sophisticated investor, experienced in investing in private equity transactions and capable of evaluating investment risks independently,
both in general and with regard to all transactions and investment strategies involving a security or securities and (3) has exercised
independent judgment in evaluating its participation in the purchase of the Shares, and accordingly, understands that the issuance of
the Shares meets (x) the exemptions from filing under FINRA Rule 5123(b)(1)(A) and (y) the institutional customer exemption under FINRA
Rule 2111(b).
(c) The
Purchaser understands that (i) the Shares constitute “restricted securities” under the Securities Act, (ii) it must bear the
economic risk of its investment in the Securities for an indefinite period of time because the Securities and Underlying Shares are not
registered under the Securities Act or any applicable state securities law and may not be resold unless subsequently registered under
the Securities Act and such other laws or unless an exemption from registration is available (iii) the offer and sale of the Securities
or Underlying Shares hereunder is not registered under the Securities Act or under any “blue sky” laws in reliance upon certain
exemptions from such registration and that the Issuer is relying on the representations made herein by the Purchaser in its determination
of whether such specific exemptions are available, and (iv) the Securities and Underlying Shares may not be transferred except pursuant
to an effective registration statement under the Securities Act, or under an exception from such registration available under the Securities
Act, and under applicable “blue sky” laws or in a transaction exempt from such registration. Furthermore, the Purchaser understands
that the Issuer may not be eligible to conduct an offering pursuant to Regulation D.
21
(d) The
Purchaser and its advisors (i) have been furnished with or have had access to all material books and records of the Issuer and all of
its material contracts, agreements and documents and (ii) have had an opportunity to ask questions of, and receive answers, and to obtain
any additional information to verify the accuracy of any information previously furnished, from management and representatives of the
Issuer and which representatives have made available to them such information regarding the Issuer and their current respective businesses,
operations, assets, finances, financial results, financial condition and prospects in order to make a fully informed decision to purchase
and acquire the Shares. Without limiting the generality of the foregoing, the Purchaser has not relied on any statements or other information
provided by anyone other than the Company concerning the Company, the Securities or the offer and sale of the Securities. The Purchaser
acknowledges that it has made its own assessment and is satisfied concerning the relevant tax and other economic considerations relevant
to the Purchaser’s acquisition of the Securities.
(e) The
Purchaser has generally such knowledge and experience in business and financial matters, and with respect to investments in securities
of privately held companies, as to enable it to understand and evaluate the risks of an investment in the Securities and form an investment
decision with respect thereto. The foregoing, however, does not limit or modify the representations and warranties set forth in Article
3 of this Agreement or the right of the Purchaser to rely thereon.
(f) The
Purchaser understands that the exemption from registration of resales of the Securities and the Underlying Shares afforded by Rule 144
(the provisions of which are known to the Purchaser) promulgated pursuant to the Securities Act depends on the satisfaction of various
conditions, including the requirement that the Issuer has been subject to the reporting requirements of Section 13 or Section 15 of the
Securities Act for at least ninety (90) days and that, if applicable, Rule 144 affords the basis for such sales only in limited amounts
and that the Issuer does not now qualify under Rule 144 and may not ever. The Purchaser understands that nothing in this Agreement shall
require the Issuer or any of its Subsidiaries to make any filing under the Securities Act or Exchange Act which the Issuer or its Subsidiaries
are not otherwise obligated to make.
Section 8.5 Governmental
Authorization; Third Party Consent.
No approval, consent, compliance,
exemption or authorization of any Governmental Authority or any other Person in respect of any requirement of Law, and no lapse of a waiting
period under a requirement of Law, is necessary or required in connection with the execution, delivery or performance by it or enforcement
against the Purchaser of this Agreement or the transactions contemplated hereby. No consent is required to be obtained under any contractual
obligation applicable to the Purchaser in connection with the execution, delivery or performance of this Agreement.
Section 8.6 No Related
Party Relationships.
Except as set forth in Schedule
8.6, the transactions contemplated by or related to this Agreement will not directly or indirectly increase any Related Person’s
ownership or voting power of the Issuer, and no Related Person will, directly or indirectly, participate in any of the post-closing operations
or decisions of or have any other rights or obligations with respect to such Purchaser or any of its direct or indirect equityholders
or any of their respective affiliates.
Section 8.7 Organization.
The Purchaser is duly organized,
validly existing and in good standing under the laws of its state of organization, and except as has not had or would not reasonably be
expected to have a material adverse effect on the Purchaser’s ability to perform its obligations under the Agreement or to consummate
the transactions contemplated hereby on a timely basis. The Purchaser is duly qualified to do business and is in good standing in all
jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified.
22
Section 8.8 Independent
Investment Decision.
The Purchaser has independently
evaluated the merits of its decision to purchase the Shares pursuant to this Agreement and conducted and relied upon its own due diligence
investigation of the Company and its own in-depth analysis of the merits and risks of the purchase of the Shares. The Purchaser understands
that nothing in this Agreement or any other materials presented by or on behalf of the Issuer to the Purchaser in connection with the
purchase of the Shares constitutes legal, tax or investment advice. The Purchaser is a sophisticated institutional accredited investor
with extensive expertise and experience in financial and business matters and in evaluating private companies and purchasing and selling
their securities and has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and
risks of an investment in the Shares, and has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed
necessary or appropriate in connection with its purchase of the Shares.
Section 8.9 No Governmental
Review.
The Purchaser understands
that no U.S. federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement
of the Shares or the fairness or suitability of the investment in the Securities nor have such authorities passed upon or endorsed the
merits of the offering of the Securities.
Section 8.10 Residency.
The Purchaser’s office
in which its investment decision with respect to the Securities was made is located at the address set forth for the Purchaser set forth
on the Purchaser’s signature page to this Agreement.
Section 8.11 Ownership.
The Purchaser and its Affiliates
are not the direct or indirect owner of record or beneficial owner of shares of Common Stock, securities convertible into or exchangeable
for Common Stock, or any other equity or equity-linked security of the Issuer.
Section 8.12 No Brokers.
No Person has, as a result
of the transactions contemplated by this Agreement, any valid right, interest or claim against or upon the Issuer or the Purchaser for
any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the
Purchaser.
Section 8.13 No Reliance.
The Purchaser is not relying
upon, and has not relied upon, any statement, representation or warranty made by any Person, except for the representations and warranties
by the Issuer contained in this Agreement.
23
Section 8.14 Financial
Capacity.
The Purchaser has, and as
of the Closing Date will have, sufficient cash on hand in a U.S. or foreign bank account or uncalled capital commitments from creditworthy
parties without any condition to fund the Subscription Amount on the terms and conditions set forth in this Agreement. Such cash has been
obtained by the Purchaser in compliance with all applicable Laws.
Section 8.15 Non-Recourse.
The Purchaser’s contractual
obligations hereunder shall be without recourse to its Affiliates, and the officers, directors, employees, managers, trustees and other
agents of the Purchaser or its Affiliates. The Issuer’s contractual obligations hereunder shall be without recourse to its Affiliates,
and the officers, directors, employees, managers, trustees and other agents of the Issuer or its Affiliates.
Section 8.16 Transfer
or Resale.
The Purchaser understands
that: (i) the Securities and the Underlying Shares have not been and are not being registered under the Securities Act or any state securities
laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) the Purchaser
shall have delivered to the Company (if requested by the Company) an opinion of counsel, in a form reasonably acceptable to the Company,
to the effect that such Securities or Underlying Shares to be sold, assigned or transferred may be sold, assigned or transferred pursuant
to an exemption from such registration, or (C) the Purchaser provides the Company with reasonable assurance that such Securities or Underlying
Shares, as applicable, can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under the Securities Act (or
a successor rule thereto) (collectively, “Rule 144”); (ii) any sale of the Securities or Underlying Shares made in
reliance on Rule 144 may be made only in accordance with the terms of Rule 144, and further, if Rule 144 is not applicable, any resale
of the Securities or Underlying Shares, as applicable, under circumstances in which the seller (or the Person through whom the sale is
made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may require compliance with some other exemption
under the Securities Act or the rules and regulations of the SEC promulgated thereunder; and (iii) neither the Company nor any other Person
is under any obligation to register the Securities or Underlying Shares under the Securities Act or any state securities laws or to comply
with the terms and conditions of any exemption thereunder. Notwithstanding the foregoing, the Securities and Underlying Shares may be
pledged in connection with a bona fide margin account or other loan or financing arrangement secured by the Securities or Underlying Shares
and such pledge of Securities or Underlying Shares shall not be deemed to be a transfer, sale or assignment of the Securities or Underlying
Shares hereunder, and no Purchaser effecting a pledge of the Securities or Underlying Shares shall be required to provide the Company
with any notice thereof or otherwise make any delivery to the Company pursuant to this Agreement, including, without limitation, this
Section 8.16.
[Signature Pages Follow.]
24
IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
Address for Notices
ISSUER
FARADAY FUTURE INTELLIGENT
ELECTRIC INC.
1990 E. Grand Avenue
El Segundo, California 90245
By:
Attention: Legal Department
Name:
Matthias Aydt
Title:
Co-Global Chief Executive Officer
Email: legal@ff.com
with a copy (which shall not constitute notice) to:
Pryor Cashman LLP
7 Times Square, 40th Floor New York, New York 10036
Attention: M. Ali Panjwani
Email: ali.panjwani@pryorcashman.com
25
PURCHASER SIGNATURE PAGES TO FARADAY FUTURE INTELLIGENT
ELECTRIC INC.
SECURITIES PURCHASE AGREEMENT
IN WITNESS WHEREOF, the undersigned
have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated
above.
Name of Purchaser: Gold King Arthur
Holding Limited
Signature of Authorized Signatory of Purchaser:
Name of Authorized Signatory: Wang Song
Title of Authorized Signatory: Director
Email Address of Authorized Signatory:
shawn.wang830927@gmail.com
Address for Notice to Purchaser: H020
3/F PHASE 2 KWAI SHING IND BUILDING 42-46 TAI LIN PAI RD KWAI CHUNG HK
Address for Delivery of Securities to Purchaser (if
not same as address for notice): Same as Address for Notice
Common Stock Subscription Amount: $500,000
Preferred Stock Subscription Amount: $11,502,191.78
EIN Number: ____________________
26
Annex A
Definitions
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person as such terms are used in and construed under Rule 405 under the Securities Act.
“Aggregate Share Issuance”
means, from time to time, the aggregate number of shares of Common Stock issued to the Purchaser pursuant to this Agreement, including
any securities of the Issuer issuable pursuant to Section 4.6(b).
“Agreement”
has the meaning set forth in the Preamble.
“Anti-Terrorism Laws”
means any Laws relating to terrorism or money laundering, including Executive Order No. 13224 (effective September 24, 2001), the USA PATRIOT
Act, the Laws comprising or implementing the Bank Secrecy Act, the Laws administered by OFAC, the Criminal Code (Canada), and the
Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) (as any of the foregoing laws may from time to time be
amended, renewed, extended, or replaced).
“Approved Stock
Plan” means any employee benefit plan which has been approved by the board of directors of the Company prior to or subsequent
to the Signing Date pursuant to which, among other things, shares of Common Stock and options to purchase Common Stock may be issued to
any employee, officer or director for services provided to the Company in their capacity as such.
“Blocked Person”
means any Person: (a) listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224, (b) owned or controlled
by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, Executive
Order No. 13224, (c) with which any Purchaser is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism
Law, (d) that commits, threatens or conspires to commit or supports “terrorism” as defined in Executive Order No. 13224;
or (e) that is named, or owned or controlled by, a “specially designated national” or “blocked person” on the
most current list published by OFAC or other similar list.
“Business Day”
means any day except Saturday, Sunday and any day which shall be a federal legal holiday in the United States or a day on which the Federal
Reserve Bank of New York is closed and/or any of the following exchanges on which the Common Stock is traded and listed, or any successor(s)
thereto, is not open for at least five (5) hours of trading: the Nasdaq Capital Market; the Nasdaq Global Market; the Nasdaq Global Select
Market; the New York Stock Exchange; or the NYSE American; and any successor to any of the foregoing markets or exchanges.
“Capitalized Lease
Obligations” shall mean any obligation under a Capital Lease.
27
“Capital Lease”
of any Person means any lease of any property by such Person as lessee which would, in accordance with GAAP, be required to be accounted
for as a capital lease on the balance sheet of such Person and shall include, without limitation, all operating leases that are not leases
for real property.
“Capital Stock”
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.
“CERCLA”
means the Comprehensive Environmental Response, Compensation and Liability Act of 1980.
“CFC” means
a controlled foreign corporation within the meaning of Section 957 of the Code.
‘Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1.
“Closing Date”
means the date on which the Closing occurs.
“Commission”
means the United States Securities and Exchange Commission.
“Common Stock”
means the Class A Common Stock of the Issuer, par value $0.0001 per share.
“Common Stock Equivalents”
means any securities of the Issuer or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including,
without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable
or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Common Stock Subscription
Amount” means the amount of Series C Convertible Preferred Stock to be purchased by the Purchaser, as provided under the heading
“Preferred Stock Subscription Amount” on the Purchaser’s signature page hereto.
“Company”
has the meaning set forth in the Preamble of this Agreement.
“Controlled Group”
means any organization which is a member of a controlled, affiliated or otherwise related group of entities within the meaning of Code
Sections 414(b), (c), (m), or (o)).
28
“Conversion Shares”
means the shares of Common Stock issuable, from time to time, upon conversion of the Series C Convertible Preferred Stock.
“Debt” shall
mean, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities
in accordance with GAAP:
(a) all
obligations for borrowed money, whether current or long-term (including the Obligations hereunder and all Capitalized Lease Obligations),
all obligations evidenced by bonds, debentures, notes or other similar instruments;
(b) all
obligations in respect of the deferred purchase price of property or services (other than trade accounts payable in the ordinary course
of business);
(c) all
non-contingent obligations under letters of credit (including standby and commercial), bankers’ acceptances and similar instruments
(including bank guaranties);
(d) the
attributable principal amount of Capital Leases, Synthetic Leases, Securitization Transaction and sale leaseback transactions;
(e) all
Debt of others secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any
Lien on, or payable out of the proceeds of production from, property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed;
(f) all
Guarantees in respect of Debt of another Person; and
(g) Debt
of any partnership or joint venture or other similar entity in which such Person is a general partner or joint venturer, and, as such,
has personal liability for such obligations, but only to the extent there is recourse to such Person for payment thereof.
For purposes hereof, the amount of Debt shall
be determined (w) based on the outstanding principal amount in the case of borrowed money indebtedness under clause (a) and purchase
money indebtedness and the deferred purchase obligations under clause (b), (x) based on the maximum amount available to be drawn
in the case of letter of credit obligations and the other obligations under clause (c), (y) based on the amount of Debt that is
the subject of the Guarantees and for which there is recourse to such Person in the case of Guarantees under clause (f) and (z)
based on the lesser of the amount of Debt secured by such lien or the fair market value of the assets pledged in the case of Debt under
clause (e).
“Dilutive Issuance”
has the meaning set forth in Section 4.5(a).
“Domestic Subsidiary”
means any Subsidiary of the Issuer organized, incorporated or otherwise formed under the laws of the United States or any state thereof,
other than any such Subsidiary that has no assets (other than de minimis amounts) other than the Capital Stock or other equity interests
of Foreign Subsidiaries that are CFCs.
29
“DVP” has
the meaning set forth in Section 2.1(b).
“DWAC” has
the meaning set forth in Section 2.2(a)(iv).
“Environmental Laws”
means any and all Laws relating to the environment or the effect of the environment on human health or to emissions, discharges or releases
of pollutants, contaminants, Hazardous Materials or wastes into the environment, including ambient air, surface water, ground water or
land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, Hazardous Materials or wastes or the clean up or other remediation thereof.
“ERISA” means
the Employee Retirement Income Security Act of 1974.
“ERISA Plan”
means any “employee benefit plan”, as such term is defined in Section 3(3) of ERISA (other than a Multiemployer Plan),
which the Issuer or any Subsidiary maintains, sponsors or contributes to, or, in the case of an employee benefit plan which is subject
to Section 412 of the Code or Title IV of ERISA, to which the Issuer or any Subsidiary or any member of the Controlled Group may
have any liability, including any liability by reason of having been a substantial employer within the meaning of Section 4063 of
ERISA at any time during the preceding five years, or by reason of being deemed to be a contributing sponsor under Section 4069 of
ERISA.
“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Excluded Securities”
means (i) shares of Common Stock, Common Stock Equivalents, or options to purchase Common Stock issued to directors, officers, employees
or consultants of the Company and/or its Subsidiaries for services rendered to the Company and/or its Subsidiaries in their capacity as
such pursuant to an Approved Stock Plan (as defined above); (ii) shares of Common Stock issued upon the conversion or exercise of convertible
securities or options (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered
by clause (i) above) issued prior to the Signing Date; and (iii) the Existing Senior Securities, Existing Unsecured Securities and any
other securities issued after the date of this Agreement pursuant to any Existing SPAs and the shares of Common Stock issuable upon conversion
or exercise of each of the foregoing.
“Existing Senior Securities”
means those certain (i) senior secured convertible notes, issued from time to time, and accompanying common warrants, pursuant to that
certain Securities Purchase Agreement, dated as of August 15, 2022, by and among the Company and FF Simplicity Ventures LLC, as such may
be amended, modified, waived and/or supplemented, as applicable, from time to time (the “August 2022 SPA”) and (ii)
secured convertible notes, issued from time to time, and accompanying common warrants, pursuant to that certain Securities Purchase Agreement,
dated as of September 5, 2024, by and among the Company and certain investors party thereto, as such may be amended, modified, waived
and/or supplemented, as applicable, from time to time (the “September 2024 SPA”).
“Existing SPAs”
means collectively, the August 2022 SPA, the September 2024 SPA, the December 2024 SPA, the March 2025 SPA, the May 2023 SPA and the July
2025 SPA.
30
“Existing Unsecured
Securities” means those certain (i) unsecured convertible notes, issued from time to time, and accompanying common warrants,
pursuant to that certain Securities Purchase Agreement, dated as of December 21, 2024, by and among the Company and certain investors
party thereto, as such may be amended, modified, waived and/or supplemented, as applicable, from time to time (the “December
2024 SPA”); (ii) unsecured convertible notes, issued from time to time, and accompanying common warrants, pursuant to that certain
Securities Purchase Agreement, dated as of March 21, 2025, by and among the Company and certain investors party thereto, as such may be
amended, modified, waived and/or supplemented, as applicable, from time to time (the “March 2025 SPA”); (iii) unsecured
convertible notes, issued, or to be issued from time to time, and accompanying common warrants, pursuant to that certain Securities Purchase
Agreement, dated as of May 8, 2023, by and among the Company and certain investors party thereto, as such may be amended, modified, waived
and/or supplemented, as applicable, from time to time (the “May 2023 SPA”); and (iv) unsecured convertible notes, issued
from time to time, and accompanying common warrants, pursuant to that certain Securities Purchase Agreement, dated as of July 14, 2025,
by and among the Company and certain investors party thereto, as such may be amended, modified, waived and/or supplemented, as applicable,
from time to time (the “July 2025 SPA”);
“FATCA” means
Sections 1471 through 1474 of the Code as of the date of this Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any applicable
agreements entered into pursuant to Section 1471(b)(1) of the Code, and any fiscal or regulatory legislation, rules or practices adopted
pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the
Code.
“FCPA” means
the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder.
“Filing Date”
has the meaning set forth in Section 4.6.
“Foreign Government
Benefit Plan” has the meaning set forth in Section 3.12(c).
“Foreign Plan”
has the meaning set forth in Section 3.12(c).
“Governmental Authority”
means any nation or government, any state or other political subdivision thereof, and any agency, department or Person exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining to government and any corporation or other Person owned
or controlled (through stock or capital ownership or otherwise) by any of the foregoing, whether domestic or foreign.
“Guarantee”
by any Person means any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Debt or other obligation
of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise,
of such Person (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation (whether
arising by virtue of partnership arrangements, by agreement to keep well, to purchase assets, goods, securities or services, to take or
pay, or to maintain financial statement conditions or otherwise) or (b) entered into for the purpose of assuring in any other manner the
obligee of such Debt or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or
in part), provided that the term Guarantee shall not include endorsements for collection or deposit in the Ordinary Course of Business.
The term “Guarantee” used as a verb has a corresponding meaning.
31
“Hazardous Materials”
means (a) any “hazardous substance” as defined in CERCLA, (b) any “hazardous waste” as defined in RCRA, (c) asbestos,
(d) polychlorinated biphenyls, (e) petroleum, its derivatives, by products and other hydrocarbons, (f) toxic mold and (g) any other pollutant,
toxic, radioactive, caustic or otherwise hazardous substance regulated under Environmental Laws.
“Hazardous Materials
Contamination” means contamination (whether now existing or hereafter occurring) of the improvements, buildings, facilities,
personalty, soil, groundwater, air or other elements on or of the relevant property by Hazardous Materials, or any derivatives thereof,
or on or of any other property as a result of Hazardous Materials, or any derivatives thereof, generated on, emanating from or disposed
of in connection with the relevant property.
“Issuer”
has the meaning set forth in the Preamble to this Agreement.
“Laws” means
any and all federal, state, provincial, territorial, local and foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, codes, injunctions, permits, concessions, grants, franchises, governmental agreements and governmental restrictions,
whether now or hereafter in effect.
“Legend Removal Date”
has the meaning set forth in the Section 4.1(c).
“Litigation”
means any claim, investigation, action, suit or proceeding before any court, mediator, arbitrator or Governmental Authority.
“Margin Stock”
has the meaning assigned thereto in Regulation U of the Federal Reserve Board.
“Material Adverse Effect”
means, with respect to any event, act, condition or occurrence of whatever nature (including any adverse determination in any litigation,
arbitration, or governmental investigation or proceeding), whether singly or in conjunction with any other event or events, act or acts,
condition or conditions, occurrence or occurrences, whether or not related, a material adverse change in, or a material adverse effect
upon, any of (a) the business, operations, properties or condition (financial or otherwise) of the Issuer, (b) the rights and remedies
of the Purchaser under this Agreement, or the ability of the Issuer, taken as a whole, to perform any of its obligations under this Agreement,
or (c) the legality, validity or enforceability of this Agreement.
“Maximum Percentage”
means 19.99% of the total outstanding shares of Common Stock immediately prior to the date hereof (subject to adjustment for any stock
splits, combinations or the like).
“MFN Agreement”
has the meaning set forth in Section 4.6(b).
“Multiemployer Plan”
means a multiemployer plan, that is intended to meet the definition set forth in Section 3(37) or 4001(a)(3) of ERISA, to which the
Issuer or any member of the Controlled Group may have any liability.
“Nasdaq”
means, collectively, the Nasdaq Capital Market; the Nasdaq Global Market; the Nasdaq Global Select Market.
32
“New Issuance Price”
has the meaning set forth in Section 4.5(a).
“Obligations”
means all loans, debts, principal, interest (including any interest that accrues after the commencement of any bankruptcy, insolvency
or other enforcement proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such proceeding), premiums,
obligations (including indemnification obligations), fees, costs, expenses and other charges (including any costs, fees, expenses or other
charges that accrue after the commencement of any bankruptcy, insolvency or other enforcement proceeding, regardless of whether allowed
or allowable in whole or in part as a claim in any such proceeding), guaranties, and all covenants and duties of any other kind and description
owing by the Issuer arising out of, under, pursuant to, in connection with, or evidenced by this Agreement 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 other expenses or other amounts that the Issuer is required to pay or reimburse by
law or otherwise in connection with this Agreement. Any reference in this Agreement to the Obligations shall include all or any portion
thereof and any extensions, modifications, renewals, or alterations thereof, both prior and subsequent to any bankruptcy, insolvency or
other enforcement proceeding.
“OFAC” means
the U.S. Department of Treasury Office of Foreign Assets Control.
“Ordinary Course of
Business” means, in respect of any action or omission taken or not taken by any Person, the ordinary course of such Person’s
business, as conducted by such Person in good faith and may include past practice, industry standards or customs, requirements of law
or as may otherwise be determined from time to time in good faith by the board of directors (or other governing body) of such Person.
“Organizational Documents”
means, with respect to any Person other than a natural person, the documents by which such Person was organized (such as a certificate
of incorporation, certificate of limited partnership or articles of formation or organization, and including, without limitation, any
certificates of designation for preferred stock or other forms of preferred equity) and the documents which relate to the internal governance
of such Person (such as by-laws, a partnership agreement or an operating, limited liability company or members agreement).
“PBGC” means
the Pension Benefit Guaranty Corporation and any Person succeeding to any or all of its functions under ERISA.
“Pension Plan”
means any ERISA Plan that is subject to Section 412 of the Code or Title IV of ERISA to which the Issuer or any member of the
Controlled Group may have a liability.
“Per Share Purchase
Price” means $0.26.
“Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity or a government or any department or agency thereof.
“Permits”
has the meaning set forth in Section 3.1.
“Permitted Contest”
means a contest maintained in good faith by appropriate proceedings promptly instituted and diligently conducted and with respect to which
such reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made; provided
that compliance with the obligation that is the subject of such contest is effectively stayed during such challenge.
33
“Preferred Stock Subscription
Amount” means the amount of Series C Convertible Preferred Stock to be purchased by the Purchaser, as provided under the heading
“Preferred Stock Subscription Amount” on the Purchaser’s signature page hereto.
“Purchaser”
has the meaning set forth in the Preamble of this Agreement.
“Purchaser Party”
has the meaning set forth in Section 6.2.
“RCRA” means
the Resource Conservation and Recovery Act of 1976.
“Related Person”
means, collectively, director, officer, employee, manager, partner or equityholder, (or any of their respective immediate family members
(as defined in 40 CFR § 170.305) or any affiliate or spouse of any such director, officer, employee, manager, partner, equityholder
or immediate family member) of FF Global Partners LLC, FF Top Holding LLC, or any of their respective affiliates.
“Registration Statement”
has the meaning set forth in Section 4.6.
“Rule 144”
has the meaning set forth in Section 8.16.
“Sanctions”
has the meaning set forth in Section 3.20(a).
“SEC Reports”
means all reports, schedules, forms, statements and other documents required to be filed by the Issuer under the Securities Act and the
Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years (or such shorter period as the Company was required
by law or regulation to file such material) preceding the date hereof or the applicable Closing Date, as applicable.
“Securities Act”
means the Securities Act of 1933, as amended, or any similar federal statute, and the rules and regulations thereunder as the same shall
be in effect at the time.
“Series C COD”
means the Certificate of Designation of Rights and Preferences of Series C Convertible Preferred Stock of the Company substantially in
the form of Exhibit A hereto.
“Series C Convertible
Preferred Stock” means Series C Convertible Preferred Stock of the Company, par value $0.0001 per share, issued or issuable
pursuant to the Series C COD.
34
“Securities”
means collectively, the shares of Common Stock, the Warrant and the shares of Series C Convertible Preferred Stock to be purchased by
the Purchaser pursuant to this Agreement.
“Securitization Transaction”
shall mean any financing or factoring or similar transaction (or series of such transactions) entered by the Issuer or any of its Subsidiaries
pursuant to which the Issuer or any of its Subsidiary may sell, convey or otherwise transfer, or grant a security interest in, accounts,
payments, receivables, rights to future lease payments or residuals or similar rights to payment to a special purpose subsidiary or affiliate
or any other Person.
“Shares”
means, collectively and as applicable, (i) the number of shares of Common Stock to be issued to the Purchaser; and (ii) the Underlying
Shares.
“Signing Date”
has the meaning set forth in the Preamble of this Agreement.
“Standard Settlement
Period” has the meaning set forth in Section 4.1(c).
“Subscription Amount”
means, collectively, the Common Stock Subscription Amount and the Preferred Stock Subscription Amount
“Subsidiary”
means, with respect to any Person, any other Person of which an aggregate of more than 50% of the outstanding Capital Stock having ordinary
voting power to elect a majority of the board of directors (or other applicable governing body) of such other Person is at the time, directly
or indirectly, owned legally or beneficially by such Person or one or more Subsidiaries of such Person, or a combination thereof, or with
respect to which any such Person has the right to vote or designate the vote of more than 50% of such Capital Stock whether by proxy,
agreement, operation of Law or otherwise. Unless the context otherwise requires, each reference to a Subsidiary shall mean a Subsidiary
of the Issuer.
“Synthetic Lease”
shall mean a lease transaction under which the parties intend that (a) the lease will be treated as an “operating lease” by
the lessee pursuant to Statement of Financial Accounting Standards No. 13, as amended and (b) the lessee will be entitled to various
tax and other benefits ordinarily available to owners (as opposed to lessees) of like property.
“Trading Day”
means a day on which the Common Stock is traded on Nasdaq.
“Transaction Documents”
means, collectively, this Agreement, the Warrant, and the Series C COD.
“Transfer Agent”
means Continental Stock Transfer & Trust Issuer, the current transfer agent of the Issuer and any successor transfer agent of the
Issuer.
“Underlying Shares”
means, collectively, the Warrant Shares and the Conversion Shares.
“U.S.” or
“United States” means the United States of America.
“Warrant”
means, a common stock purchase warrant to purchase 1,000,000 shares of Common Stock substantially in the form of Exhibit B
attached hereto or such other form as shall be agreed between the Issuer and the Purchaser.
“Warrant Shares”
means the shares of Common Stock issuable upon exercise of the Warrant.
35
EXHIBIT A
CERTIFICATE OF DESIGNATION OF RIGHTS AND PREFERENCES
OF
SERIES C CONVERTIBLE PREFERRED STOCK OF
FARADAY FUTURE INTELLIGENT ELECTRIC INC.
EXHIBIT B
COMMON STOCK PURCHASE WARRANT
faraday
future intelligent electric inc.
EX-10.2 — LOAN AGREEMENT DATED APRIL 10, 2026, BY AND BETWEEN FARADAY FUTURE INTELLIGENT ELECTRIC INC. AND THE INVESTOR
EX-10.2
Filename: ea028657901ex10-2.htm · Sequence: 5
Exhibit
10.2
LOAN
AGREEMENT
THIS
LOAN AGREEMENT (this “Agreement”) is made and effective as of April 10, 2026, by and between:
(1) Gold
King Arthur Holding Limited, a limited liability company incorporated in Hong Kong, whose
registered office is situated at H020 3/F Phase 2 Kwai Shing Ind Building 42-46 Tai Lin Pai
Rd, Kwai Chung, Hong Kong (the “Lender”);
(2) Faraday
Future Intelligent Electric Inc., a Delaware corporation, with its principal place of
business at 1990 E. Grand Ave., El Segundo, CA 902 (the “Borrower” and,
collectively with the Lender, the “Parties,” and each, a “Party”).
In
consideration of the mutual representations, warranties, covenants, agreements and conditions contained in this Agreement, and the other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Parties, the Parties hereby agree
as follows:
1. THE
LOAN
1.1 Subject
to the terms and conditions of this Agreement, Lender agrees to lend to the Borrower an aggregate of US$2,000,000 (the “Loan”).
2. PURPOSE
2.1 The
Loan funds shall be allocated for expenses associated with the Borrower’s robotics business, other business operations (including
but not limited to payroll), and any additional unforeseen expenses that are directly related to these specified activities.
3. ADVANCEMENT
3.1 On
or before April 10, 2026, the Lender shall initiate the wire transfer of the Loan (the “Advancement Date”)
4. MATURITY
4.1 The
term of the Loan shall commence from the Advancement Date and end on the last date of a period of 1 year starting from the Advancement
Date (the ending date is referred to herein as the “Maturity Date”).
5. SECURITY
5.1 The
Loan is and shall remain at all times the unsecured obligations of the Borrower.
6. INTEREST
(a) The
interest rate of the Loan is 10% per annum (with 365 days) of simple interest, calculated based on the actual principal amount in the
Loan and the actual number of days as elapsed in the period from the Advancement Date to the date on which the aggregate outstanding
principal amount of the Loan, together with accrued and unpaid interest thereon (the “Total Accrued Loan Amount”)
are repaid.
7. REPAYMENT
AND PREPAYMENT
7.1 Subject
to Section 7.2, Borrower shall repay the Total Accrued Loan Amount in full on or before the Maturity Date unless otherwise agreed
by the Parties.
7.2 Notwithstanding
Section 7.1, Borrower may prepay any or part of the Total Accrued Loan Amount at its sole discretion at any time prior to the
Maturity Date, provided that the Lender receives a written notice at least five (5) business days in advance of such prepayment.
8. CONVERSION
RIGHT
8.1 Lender
shall have the right, from time to time, to convert all or part of its Loan then outstanding, plus any accrued and unpaid interest, into
the securities of the Borrower issuable pursuant to the terms of that certain Securities Purchase Agreement, dated as of February 5,
2026 (as amended, restated, amended and restated or otherwise modified from time to time, the “SPA”) between the Borrower
and the Lender, with an aggregate value equal to the amount of the Loan to be converted (the “Conversion Amount”),.
The Conversion Amount shall be treated as a portion of the Lender’s Subscription Amount (as defined in the SPA).
8.2 Any
conversion notice pursuant to this Section 8 shall be made in writing by Lender to Borrower, which notice may be made via email
to Koti Meka, Chief Financial Officer, at koti.meka@ff.com, with a copy to Mark Sun, Acting Head of Global Capital Markets and Investor
Relations, at mark.sun@ff.com.
2
8.3 In
no event shall any conversion of this Loan, whether in whole or in part, result in the Lender (together with the Lender’s affiliates,
and any other persons acting as a group together with the Lender or any of the Lender’s affiliates (such persons, “Attribution
Parties”)) beneficially owning 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 Lender and its affiliates and Attribution Parties shall include
the number of shares of Common Stock issuable upon conversion of this Loan with respect to which such determination is being made, but
shall exclude the number of shares of Common Stock which would be issuable upon (i) conversion of the remaining, unconverted principal
amount of the Loan beneficially owned by the Lender or any of its affiliates or Attribution Parties and (ii) exercise or conversion of
the unexercised or unconverted portion of any other securities of the Borrower subject to a limitation on conversion or exercise analogous
to the limitation contained herein beneficially owned by the Lender or any of its affiliates or Attribution Parties. Except as set forth
in the preceding sentence, for purposes of this Section 8.3, beneficial ownership shall be calculated in accordance with Section 13(d)
of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that the limitation contained in this Section
8.3 applies, the determination of whether the Loan is convertible (in relation to other securities owned by the Lender together with
any affiliates and Attribution Parties) and of which principal amount of the Loan is convertible shall be in the reasonable discretion
of the Lender. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section
13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 8.3, in determining the
number of outstanding shares of Common Stock, the Lender may rely on the number of outstanding shares of Common Stock as reflected in
(A) the Borrower’s most recent periodic or annual report filed with the Securities and Exchange Commission, as the case may be,
(B) a more recent public announcement by the Borrower, or (C) a more recent written notice by the Borrower or the Borrower’s transfer
agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of the Lender, the Borrower shall
within two (2) trading days confirm orally and in writing to the Lender the number of shares of Common Stock then outstanding. In any
case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities
of the Borrower, including the portion of the Loan being converted, by the Lender or its affiliates since the date as of which such number
of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 19.99% of the number of
shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion
of the Loan. The Lender, upon notice to the Borrower, may increase or decrease the Beneficial Ownership Limitation provisions of this
Section 8.3; provided that the Beneficial Ownership Limitation in no event exceeds 19.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of the Loan held by the Lender
and the Beneficial Ownership Limitation provisions of this Section 8.3 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 Borrower. The Beneficial Ownership Limitation
provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this
Section 8.3 to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership
Limitation contained herein or to make changes or supplements necessary or desirable to properly give effect to such limitation. The
preceding limitations contained in this paragraph shall apply to a successor lender of the Loan.
3
9. PAYMENTS
All
payments to be made by the Borrower to the Lender in respect of this Agreement shall be made in United States dollars and shall be made
free and clear of, and without withholding or deduction for or on account of, any taxes, duties, assessments or governmental charges
of whatever nature imposed, levied, collected, withheld or assessed by or within the United States, or any authority therein or thereof
having power to tax or from which any payment is made with respect to this Agreement, unless such withholding or deduction is required
by law. In the event that any such withholding or deduction in respect of such payment by the Borrower to the Lender is so required by
law or by regulation or by governmental policy having the force of law, the Borrower shall pay such additional amounts as will result
in receipt by the Lender of such amounts as would have been received by the Lender had no such withholding or deduction been required
to be made. All payments to be made by the Borrower to the Lender in respect of this Agreement shall be made to such account with such
bank as will be designated by the Lender from time to time.
10. REPRESENTATIONS
AND WARRANTIES
10.1 Representations
and warranties of the Borrower. The Borrower represents and warrants to Lender that:
(a) Due
incorporation: the Borrower is a company duly incorporated with limited liability and validly existing under the laws of the place
of its incorporation, and is a separate legal entity capable of suing and being sued in its own name;
(b) Capacity
to enter into: the Borrower has the full capacity and legal right to enter into and engage in the transactions contemplated by this
Agreement and has taken or obtained all necessary action and consents to authorize the execution and performance of this Agreement;
(c) Binding
obligations: this Agreement constitutes, or when executed and delivered will constitute, legal, valid and binding obligations of
the Borrower enforceable in accordance with the terms herein;
(d) No
conflict with other obligations: neither the execution of this Agreement nor the performance by the Borrower of any of its obligations
or the exercise of any of its rights thereunder will conflict with or result in a breach of any law, agreement or obligation applicable
to the Borrower or cause any limitation placed on it to be exceeded;
(e) No
misleading information: all information provided to Lender by or on behalf of the Borrower in connection with the Loan is true and
accurate in all respects, and the Borrower is not aware of any fact which has not been disclosed in writing to Lender which might have
a material effect on the Loan or which might affect the willingness of the Lender to lend upon the terms of this Agreement; and
(f) Not
an investment company: the Borrower is not an “investment company” under the Investment Company Act of 1940, as amended,
and is not a company “controlled” by an “investment company” under the Investment Company Act of 1940, as amended.
4
11. EVENTS
OF DEFAULT
11.1 Each
of the following events and circumstances shall be an “Event of Default” under this Agreement:
(a) Insolvency
proceedings and other procedures: a proceeding is commenced or an effective order is
made for the winding-up, insolvency, dissolution or bankruptcy of the Borrower or for the
appointment of a liquidator, receiver, administrator, trustee or similar officer of the Borrower
before due fulfillment and termination of this Agreement.
(b) Breach
of Loan purpose: Borrower applies, invests or in any way uses the Loan other than the
purpose provided in Section 2.1, which is not duly rectified as prescribed under Section
11.2(b).
(c) Non-payment:
Borrower fails to repay the Total Accrued Loan Amount in full on or before the Maturity Date.
(d) Invalidation
of this Agreement: including where –
a. The
Borrower asserts or engages in any action or inaction based on which any material provision
of this Agreement has ceased to be or otherwise is not valid, binding and enforceable in
accordance with the terms and provisions hereof, which is not duly rectified as prescribed
under Section 11.2(b); and
b. Any
material provision in this Agreement for any reason attributable to the Borrower ceases to
be valid, binding and enforceable in accordance with the terms and provisions thereof, which
is not duly rectified as prescribed under Section 11.2(b).
11.2 Remedies
on Events of Default.
(a) Automatic
acceleration without rectification requirement. Upon occurrence of such Events of Default as provided in Section 11.1(a) to
Section 11.1(c), the Total Accrued Loan Amount shall become automatically due and payable.
(b) Acceleration
upon unsatisfactory rectification.
(i) If
any facts or circumstances pertaining to those Events of Default as provided in Section 11.1(d)) happen, Lender may, by written
notice to the Borrower (the “Rectification Notice”), demand the relevant recipient(s) to rectify in such manner prescribed
in the Rectification Notice within five (5) business days after due receipt of the Rectification Notice (the “Rectification
Period”).
(ii) After
due receipt of the Rectification Notice, the recipient(s) thereof shall complete the rectification in such manner prescribed in the Rectification
Notice within the Rectification Period to the reasonable satisfaction of Lender.
(iii) If
the aforementioned rectification is not completed upon expiration of the Rectification Period in accordance with this Section 11.2(b)(ii),
Lender may declare in writing the Total Accrued Loan Amount become immediately due and payable and demand full repayment of the Total
Accrued Loan Amount.
5
12. FURTHER
ASSURANCE
12.1 Each
Party shall promptly execute and deliver all such documents, and do all such things, as the other Party may from time to time reasonably
require for the purpose of giving full effect to the provisions of this Agreement and to secure for the other Party the full benefit
of the rights, powers and remedies conferred upon it under this Agreement.
13. DISCLOSURE
OBLIGATIONS
13.1 The
Borrower shall bear full responsibility for ensuring compliance with all disclosure requirements as mandated by securities laws and any
other relevant legislation.
14. WAIVER
AND AMENDMENT
14.1 A
failure or delay by a Party to exercise any right or remedy provided under this Agreement or by law, whether by conduct or otherwise,
shall not constitute a waiver of that or any other right or remedy, nor shall it preclude or restrict any further exercise of that or
any other right or remedy. No single or partial exercise of any right or remedy provided under this Agreement or by law, whether by conduct
or otherwise, shall preclude or restrict the further exercise of that or any other right or remedy.
14.2 A
waiver of any right or remedy under this Agreement shall only be effective if given in writing and shall not be deemed a waiver of any
subsequent breach or default.
14.3 No
variation or amendment of this Agreement shall be valid unless it is in writing and duly executed by or on behalf the Parties to this
Agreement.
15. ASSIGNMENT
Neither
Party may assign or transfer any of its rights, benefits or obligations under this Agreement without the prior consent of the other Party,
which shall not be unreasonably withheld or delayed; provided, however, that in the event of an Event of Default, the Lender may assign
or transfer any of its rights and benefits under this Agreement to any person without the consent of the Borrower.
16. COSTS
The
Borrower shall reimburse the Lender on demand for all reasonable out-of-pocket costs, expenses and fees (including reasonable expenses
and fees of its counsel) incurred by the Lender in connection with the transactions contemplated hereby, including the negotiation, documentation
and execution of this Agreement and expenses of the Lender in connection with this Agreement and the enforcement of the Lender’s
rights hereunder.
6
17. SEPARATION
In
the event that any provision of this Agreement, or the application thereof, becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement shall continue in full force and effect and shall be interpreted
so as reasonably to effect the intent of the Parties. The Parties further agree to use their commercially reasonable efforts to replace
such void or unenforceable provision of this Agreement with a valid and enforceable provision that shall achieve, to the extent possible,
the economic, business and other purposes of such void or unenforceable provision.
18. COUNTERPARTS
This
Agreement may be executed in any number of counterparts and any Party may enter into this Agreement by executing and delivering a counterpart.
Each counterpart constitutes the agreement of the Party who has executed and delivered that counterpart. Faxed or scanned signatures
are taken to be valid and binding to the same extent as original signatures.
19. NOTICES
All
notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon
the earlier of actual receipt, or (a) personal delivery to the party to be notified, (b) when sent, if sent by electronic mail or facsimile
during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business
day, (c) five (5) business days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or
(d) one (1) business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day
delivery, with written verification of receipt. All communications shall be sent to the respective parties at their address as set forth
on the signature page, or to such email address, facsimile number or address as subsequently modified by written notice given in accordance
with this Section 19.
20. GOVERNING
LAW AND JURISDICTION
The
internal laws of the State of New York, irrespective of its conflicts of law principles, shall govern the validity of this Agreement,
the construction of its terms, and the interpretation and enforcement of the rights and duties of the Parties. The Parties hereby irrevocably
submit to the exclusive jurisdiction of the federal and state courts located within the State of New York solely in respect of the interpretation
and enforcement of the provisions of this Agreement and of the documents referred to in this Agreement, and in respect of the transactions
contemplated hereby and thereby, and hereby waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation
or enforcement hereof or thereof, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not
maintainable in said courts or that the venue thereof may not be appropriate or that this Agreement or any such document may not be enforced
in or by such courts, and the Parties irrevocably agree that all claims with respect to such action or proceeding shall be heard and
determined in such federal or state courts located within the State of New York. The Parties hereby consent to and grant any such court
jurisdiction over the person of such Parties and over the subject matter of such dispute and agree that mailing of process or other papers
in connection with any such action or proceeding in the manner provided in Section 20 or in such other manner as may be permitted
by applicable law, shall be valid and sufficient service thereof. With respect to any particular action, suit or proceeding, venue shall
lie solely in the State of New York.
7
21. Third
Party Beneficiaries
Nothing
in this Agreement, express or implied, is intended to confer upon any party other than the Parties or their respective successors and
permitted assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement of such provisions, all
to the same extent as if such persons were parties to this Agreement.
22. Entire
Agreement
This
Agreement constitutes the full and entire understanding and agreement among the Parties with respect to the subject matter hereof, and
any other written or oral agreement relating to the subject matter hereof existing between the Parties is expressly canceled.
23. DISCLOSURE
The
Borrower hereby represents and warrants to the Lender that, to its knowledge, immediately following the execution of this Agreement,
all material non-public information regarding the Borrower or any of its subsidiaries that has been disclosed to the Lender by the Borrower
on or prior to the date hereof has been disclosed in the Borrower’s public filings with the Securities and Exchange Commission
on or prior to the date hereof.
[Remainder
of Page Intentionally Left Blank]
8
IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written.
LENDER
Gold
King Arthur Holding Limited
By:
Name:
Title:
Address:
Attention:
Email:
IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written.
BORROWER
Faraday
Future Intelligent Electric Inc.
By:
Name:
Koti
Meka
Title:
Chief
Financial Officer
Address:
1990
E Grand Ave, El Segundo, CA, 90245
Attention:
Koti
Meka
Email:
koti.meka@ff.com
EX-99.1 — PRESS RELEASE DATED APRIL 15, 2026
EX-99.1
Filename: ea028657901ex99-1.htm · Sequence: 6
Exhibit 99.1
Faraday Future Amends $10 Million Equity Investment
Agreement to $12 Million,
Eliminating Anti-Dilution Provision to Strengthen
Stockholder Protections
● Increase the Subscription Amount from $10 million to $12 million, $500,000 of which was used to purchase
shares of Common Stock and $11.5 million of which was used to purchase shares of the Company’s newly designated Series C preferred
stock, which is convertible into the Company’ Common Stock. AIXC and the designated third-party will use the US$500,000 of
common stock to explore the real-world asset (RWA) business.
● Replace the true-up provision by issuance of a warrant. On the Closing Date, the Company issued to the Investor a warrant to purchase
up to 1,000,000 shares of Common Stock at an exercise price of $1.50 per share with a term of 4 years, exercisable only after the delivery
of the 500th FX Super One vehicle to customers.
● The proceeds support the Company’s EAI business, especially the target of 1,000 deliveries and continuous positive contribution
margin of robotics in 2026.
● FF believes the execution of this amendment demonstrates the potential of the complementary relationship between its core EAI business
and the digital asset ecosystem and may provide a framework for future cooperation.
LOS ANGELES, CA (April 15, 2026) — Faraday Future Intelligent
Electric Inc. (NASDAQ: FFAI) (“Faraday Future,” “FF” or the “Company”), a California-based global
shared intelligent electric mobility ecosystem company, today announced ““that it has amended and restated the securities
purchase agreement, initially entered into on February 4, 2026 (the ““Initial Agreement”” and such Initial Agreement
as so amended and restated, the “A&R Agreement”) with Gold King Arthur Holding Limited (the “Purchaser”),
a designated third-party investor identified by AIxCrypto Holdings Inc. (NASDAQ: AIXC) (“AIxC”), to (i) increase to the total
purchase amount from $10 million to $12 million, $500,000 for common stock and $11.5 million for preferred stock; (ii) terminate the anti-dilution
true-up provision and replace it with a fixed, milestone-linked warrant, and (iii) revise the per share purchase price to the average
closing price of the 10 trading days prior to the signing date of the A&R Agreement (the “Signing Date”).
The Company believes the Amendment is favorable to existing stockholders,
by replacing dilution exposure with a fixed obligation tied to operational milestones and increasing the total purchase amount to support
its EAI Strategy Execution.
Amendment to Securities Purchase Agreement
The Company and the Purchaser agreed to amend and restate in the Initial
Agreement to, among other things,
(i) increase the total securities purchase amount from $10 million to $12 million, $500,000 of which was used to purchase shares of common
stock and $11.5 million of which was used to purchase a newly-designated series of the Company’s preferred stock, which is convertible
into shares of Common Stock;
(ii) remove the true-up provision set forth in Section 4.5 of the Initial Agreement in exchange for the issuance of a common stock purchase
warrant. On the closing date, the Company issued to the Investor a warrant to purchase up to 1,000,000 shares of Common Stock at an exercise
price of $1.50 per share with a term of 4 years, exercisable only after the Company delivers the 500th FX Super One vehicle to customers.;
and
(iii) revise the per share purchase price to the average closing price over the 10 trading days prior to the signing date as of April 14,
2026. Based on the new reference price of $0.26 per share, the $500,000 common stock investment corresponds to the issuance of 1,923,077
shares of Class A Common Stock.
The company believes the amendment improves compatibility with future
financing transactions, and reflects the investor’s commitment to long-term value creation aligned with the Company’s operational
milestones rather than short-term price compensation.
Transaction Benefits and Use of Proceeds
The Company has received $12 million in gross proceeds, before offering
expenses, pursuant to the A&R Agreement, which AIxC has pre-funded to the Company on behalf of such investor in advance of closing
of the transaction. This is an equity financing, with low transaction fees— resulting in a cost-efficient capital structure. Proceeds
support the Company’s robotics and FX Super One businesses, including the commencement of initial EAI robotics deliveries and the
continued advancement of the FX Super One strategy as the Company progresses toward its start-of-delivery targets.
FF believes this transaction demonstrates the potential of the complementary
relationship between its core EAI business and the digital asset ecosystem and may provide a framework for future cooperation.
Management Commentary
“This A&R Agreement eliminates a source of uncertainty
in our capital structure and demonstrates our commitment to protecting stockholder interests. By replacing the anti-dilution provision
with a fixed, milestone-linked warrant at a premium exercise price, we are aligning this investment with our execution roadmap. With the
$12 million in proceeds, which the accredited investor pre-funded by AIxC on behalf of such investor in advance of closing, now actively
supporting EAI robotics deliveries and FX Super One advancement — and with no convertible debt — we believe this transaction
reflects a disciplined approach to capital formation,” stated Jerry Wang, Global President of Faraday Future.
The shares of Class A common stock underlying the Warrant and the convertible
preferred stock, if and when issued upon exercise or conversion, as applicable, will initially be unregistered and subject to customary
transfer restrictions under federal and state securities laws. For additional information regarding the material terms of the A&R
Agreement and the Warrant, and the material right and obligations of the convertible preferred stock, please see the Company’s Current
Report on Form 8-K to be filed with the Securities and Exchange Commission on or around the date hereof.
2
About Faraday Future
Faraday Future is a California-based global intelligent Company
founded in 2014 and is dedicated to reshaping the future of mobility through vehicle electrification, intelligent technologies, and AI
innovation. Its flagship vehicle, the FF 91, began deliveries in 2023 and reflects the brand’s pursuit of ultra-luxury, cutting-edge
technology, and high performance. FF’s second brand, FX, targets the high-volume mainstream vehicle market. Its first model, Super
One, is positioned as a first-class EAI-MPV, with deliveries planned to begin in 2026. FF recently announced its entry into the Embodied
AI Robotics business with sales beginning this year, connecting its future strategy of bringing a new era of EAI vehicles and EAI robotics.
For more information, please visit https://www.ff.com/
Forward-Looking Statements
This press release includes “forward-looking statements”
within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this
press release, the words “plan to,” “can,” “will,” “should,” “future,” “potential,”
and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify
forward-looking statements. These forward-looking statements, which include statements regarding the Company’s deployment of investment
proceeds, EAI robotics production and delivery plans, FX Super One delivery plans, the exercisability and terms of the Warrant, the anticipated
benefits of the A&R Agreement to the Company’s capital structure and stockholders, and AIxC’s digital asset tokenization
plans, involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside
the Company’s control, which could cause actual results or outcomes to differ materially from those discussed in the forward-looking
statements.
Important factors, among others, that may affect actual results or
outcomes include: the Company’s ability to commence and ramp production and delivery of the FX Super One on the anticipated timeline;
the Company’s ability to achieve the 500-vehicle delivery milestone that triggers the exercisability of the Warrant; demand for
the Company’s robotics products; competition in the robotics industry; the Company’s reliance on a single OEM for robotics
products; tariff uncertainty for imported products; AIxC’s ability to execute on its digital asset tokenization plans, which is
not within the Company’s control; the Company’s ability to maintain its listing on Nasdaq; the need for additional share capital
to fully execute on its strategy; the Company’s ability to secure the necessary funding to execute on the FX strategy; the Company’s
ability to continue as a going concern; general market and economic conditions; and the other factors described in the Company’s
most recent Annual Report on Form 10-K and subsequent periodic filings with the SEC. Any forward-looking statements speak only as of the
date of this press release. The Company does not undertake any obligation to update any forward-looking statements, whether as a result
of new information, future events or otherwise, except as required by law.
Investor Relations (English):ir@ff.com
Investors (Chinese): cn-ir@ff.com
Media: john.schilling@ff.com
3
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