This prospectus supplement
updates and supplements the prospectus May 26, 2023, which forms a part of our Registration Statement on Form S-1, as amended (the May
26 Prospectus), the prospectus dated April 5, 2023, which forms a part of our Registration Statement on Form S-1, as amended (Registration
No. 333-268972) (the “April 5 Prospectus”), the prospectus dated March 22, 2023, which forms a part of our Registration Statement
on Form S-1, as amended (Registration No. 333-268722) (the “ELOC Prospectus”), and the prospectus dated March 22, 2023, which
forms a part of our Registration Statement on Form S-1, as amended (Registration No. 333-269729) (the “SPA Prospectus” and,
together with the May 26 Prospectus, April 5 Prospectus and the ELOC Prospectus, the “Prospectuses”). This prospectus supplement
is being filed to update and supplement the information in the Prospectuses with the information contained in our Current Report on Form
8-K, filed with the Securities and Exchange Commission on June 27, 2023 (the “Current Report”), other than the information
included in Item 7.01 and Exhibit 99.1, which was furnished and not filed. Accordingly, we have attached the Current Report to this prospectus
supplement.
The May 26, 2023 Prospectus
and this prospectus supplement relate to the issuance by us, and the offer and sale from time to time by the selling securityholders
named in the May 26 Prospectus (the “May 26 Securityholders”) of up to an aggregate of 115,504,901 shares of the Class A
common stock, par value $0.0001 per share of Faraday Future Intelligent Electric Inc. (“FFIE” and such Class A common stock,
the “Class A Common Stock”) issuable upon conversion of certain convertible notes issued in a private placement to certain
institutional investors pursuant to a Securities Purchase Agreement, dated as of August 14, 2022, as amended on September 23, 2022 (the
“SPA”), pursuant to the Joinder and Amendment Agreement to the SPA (the “Joinder”), dated as of September 25,
2022, pursuant to the Limited Consent and Third Amendment to the SPA (the “Third Amendment”), dated as of October 24, 2022,
pursuant to the Limited Consent and Amendment to the SPA (the “Fourth Amendment”), dated as of November 8, 2022, pursuant
to the Letter Agreement and Amendment to the SPA (the “Senyun Amendment”), dated as of December 28, 2022, pursuant to the
Limited Consent and Amendment No. 5 (the “Fifth Amendment”), dated as of January 25, 2023, pursuant to the Amendment No.
6 to Securities Purchase Agreement (the “Sixth Amendment”), dated as of February 3, 2023, pursuant to the Amendment No. 7
to Securities Purchase Agreement (the “Seventh Amendment”), dated as of March 23, 2023, and pursuant to the Amendment No.
8 to the Securities Purchase Agreement (the “Eighth Amendment”), dated as of May 9, 2023.
The April 5 Prospectus and
this prospectus supplement relate to the offer and sale from time to time by the selling securityholders named in the April 5 Prospectus
(the “April 5 Selling Securityholders”) of (i) 27,733,421 shares of the Class A common stock, par value $0.0001 per share,
of Faraday Future Intelligent Electric Inc. (“FFIE” and such Class A common stock, the “Class A Common Stock”)
originally purchased in the PIPE Financing (as defined in the April 5 Prospectus) by certain of the April 5 Selling Securityholders at
a purchase price of $10.00 per share, (ii) 213,366 Founder Shares (as defined in the April 5 Prospectus) by certain of the April 5 Selling
Securityholders previously acquired by our predecessor’s sponsor at an effective purchase price of $0.0043 per share, (iii) 170,131
shares of Class A Common Stock issued to designees of EarlyBirdCapital, Inc. as underwriters’ compensation in connection with the
initial public offering of Property Solutions Acquisition Corp. (“PSAC”) at an effective purchase price of $0.0041 per share
at an effective purchase price of $0.0041 per share, (iv) 586,000 shares of Class A Common Stock issued on July 22, 2022 as consideration
for consulting and advisory services pursuant to an omnibus transaction services fee agreement and acknowledgement, as amended, with Riverside
Management Group in connection with the Business Combination (as defined in the April 5 Prospectus), (v) 86,395,848 shares of Class A
Common Stock originally issued to Season Smart Limited (“Season Smart”) and Founding Future Creditors Trust as consideration
in connection with the Business Combination at a per share value of $10.00 per share, (vi) 64,000,588 shares of Class A Common Stock underlying
the shares of FFIE’s Class B common stock, par value $0.0001 per share, originally issued to FF Global Partners Investment LLC,
formerly FF Top Holding LLC (“FF Top”), as consideration in connection with the Business Combination at a per share value
of $10.00 per share, (vii) 21,263,758 Earnout Shares not currently beneficially owned that Season Smart, FF Top and certain FFIE executives
have the contingent right to receive pursuant to the Merger Agreement, (viii) 150,322 shares of Class A Common Stock issued to certain
FFIE executives in satisfaction of deferred compensation owed by FFIE to such FFIE executives prior to the closing of the Business Combination,
(ix) 484,856 shares of Class A Common Stock issued to certain FFIE executives upon such FFIE executives’ exercise of options, (x)
54,252 shares of Class A Common Stock issued to Chui Tin Mok upon closing of the Business Combination in satisfaction of his related party
note payable, (xi) 4,923,072 shares of Class A Common Stock issued upon exercise of certain warrants issued in a private placement to
certain institutional investors pursuant to a Second Amended and Restated Note Purchase Agreement, dated October 9, 2020 (such warrants,
the “ATW NPA Warrants”), and (xii) 182,376,970 shares of Class A Common Stock issued upon conversion of certain convertible
notes and 25,059,528 shares of Class A Common Stock issued upon exercise of certain warrants, in each case issued pursuant to the SPA,
pursuant to the Joinder, pursuant to the Third Amendment, the Fourth Amendment, the Senyun Amendment, the Fifth Amendment and the Sixth
Amendment (such notes, the “SPA Notes” and such warrants, the “SPA Warrants”).
The April 5 Prospectus and
this prospectus supplement also relate to the offer and sale from time to time by the April 5 Selling Securityholders of up to 111,131
warrants (the “Private Warrants”), all of which were included in the private units purchased by our predecessor’s sponsor
and EarlyBirdCapital, Inc. in connection with the initial public offering of PSAC at a price of $10.00 per unit.
The April 5 Prospectus
and this prospectus supplement also relate to the issuance by us, and the offer and sale from time to time by the April 5 Selling Securityholders,
of up to an aggregate of 157,210,985 shares of Class A Common Stock which consists of (i) 111,131 shares of Class A Common Stock that
are issuable upon the exercise of the Private Warrants, (ii) 23,540,988 shares of Class A Common Stock that are issuable upon the exercise
of the 23,540,988 warrants (the “Public Warrants”) originally issued in the initial public offering of PSAC (or otherwise
originally included in the private units purchased in connection with the initial public offering of PSAC, and subsequently sold), (iii)
23,508,563 shares of Class A Common Stock issuable upon exercise of NPA Warrants, and (iv) 90,409,839 shares of Class A Common Stock issuable
upon conversion of SPA Notes and 19,640,464 shares of Class A Common Stock issuable upon exercise of the SPA Warrants.
The ELOC Prospectus and this
prospectus supplement relate to the resale from time to time of up to 90,909,091 shares of Class A Common Stock by YA II PN, Ltd., a Cayman
Islands exempt limited partnership (“Yorkville”). The shares included in the ELOC Prospectus consist of (i) 789,016 shares
of Class A Common Stock that we issued to Yorkville on November 25, 2022 as a commitment fee and (ii) up to 90,120,075 shares of Class
A Common Stock that we may elect, in our sole discretion, to issue and sell to Yorkville, from time to time after the date of the ELOC
Prospectus, pursuant to a standby equity purchase agreement we entered into with Yorkville on November 11, 2022, in which Yorkville has
committed to purchase from us, at our direction, up to $200.0 million of shares of our Class A Common Stock (which commitment amount may
be increased to up to $350.0 million at FFIE’s election), subject to terms and conditions specified in the Purchase Agreement.
The SPA Prospectus and this
prospectus supplement relate to the issuance by us, and the offer and sale from time to time by the selling securityholders named in the
SPA Prospectus (the “SPA Selling Securityholders”), of up to an aggregate of 500,285,185 shares of Class A Common Stock which
consists of (i) 110,452,771 shares of Class A Common Stock that are issued or issuable upon exercise of certain warrants issued or issuable
pursuant to the SPA, and (ii) 389,832,414 shares of Class A Common Stock that are issued or issuable upon conversion of certain convertible
notes issued or issuable pursuant to the SPA.
This prospectus supplement
should be read in conjunction with the Prospectuses. This prospectus supplement updates and supplements the information in the Prospectuses.
If there is any inconsistency between the information in the Prospectuses and this prospectus supplement, you should rely on the information
in this prospectus supplement.
Our shares of Class A Common
Stock and our Public Warrants are listed on The Nasdaq Stock Market (“Nasdaq”), under the symbols “FFIE” and “FFIEW.” On
June 26, 2023, the closing price of our Class A Common Stock was $0.2357 per share and the closing price of our Public Warrants was $0.039
per Public Warrant.
The date of this prospectus supplement is June
27, 2023.
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:
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).
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.
On June 26, 2023, Faraday Future Intelligent Electric Inc. (the “Company”)
entered into Amendment No. 1 (“Amendment No. 1”) to that certain Securities Purchase Agreement dated as of May 8,
2023 (the “Unsecured SPA”), by and among the Company, Metaverse Horizon Limited and V W Investment Holding Limited, as purchasers
(collectively with additional purchasers from time to time party thereto, the “Unsecured SPA Purchasers”). Amendment No. 1
amended and restated Section 2.1(a)(i) of the Unsecured SPA to provide that the Unsecured SPA Purchasers may, in their reasonable discretion,
postpone or cancel any closing of their purchase of the Company’s unsecured convertible senior promissory notes (the “Unsecured
Notes”) pursuant to the Unsecured SPA if the Company has not issued a press release or other public announcement confirming that
the second phase of the Company’s three-phase delivery plan has begun on or prior to August 31, 2023, within 15 calendar days
of such date.
On June 26, 2023, the Company entered into a Joinder and Amendment
Agreement (the “FFVV Joinder”) with FF Vitality Ventures LLC (“FFVV”), pursuant to which FF Simplicity Ventures
LLC or a permitted assign (“FFSV”) agreed to exercise its option to purchase $20,000,000 of Tranche B Notes in accordance
with the terms of the Securities Purchase Agreement, dated as of August 14, 2022 (as amended as of the date of the FFVV Joinder, the “Secured
SPA”), with funding of 75% of such amount within five business days of the date of the FFVV Joinder and the remaining 25% of such
amount within three business days thereafter, subject to the satisfaction of the following closing conditions (the “Tranche B Closing
Conditions”): (i) delivery of a warrant registered in the name of FFSV to FFSV to purchase up to a number of shares of the Company’s
Class A Common Stock (the “Common Stock”) equal to 33% of FFSV’s Conversion Shares (as defined in the Secured SPA) on
the Closing Date (as defined in the Secured SPA) with an exercise price equal to $0.8925, (ii) delivery to FFSV of the applicable Tranche
B Note, (iii) subject to the Note Waivers (as defined in the FFVV Joinder), no Default or Event of Default exists, as such terms are defined
under the Secured SPA, and (iv) subject to the Note Waivers, that the representations and warranties in the Financing Documents (as defined
in the Secured SPA) are true and correct in all material respects (without duplication of any materiality qualifier) both before and after
giving effect to such Tranche B Note. If FFSV exercises its option to invest another $10,000,000 of Tranche B Notes in accordance with
the terms of the Secured SPA on or prior to the later of (x) August 1, 2023 or (y) four business days after the meeting of the Company’s
stockholders for the required stockholder approval under the Unsecured SPA to increase the Company’s authorized shares of Common
Stock and for purposes of the Nasdaq Stock Market (“Nasdaq”) Listing Rule 5635 (to the extent needed) (the “Stockholder
Approval”), then the Company agrees to subsequently amend the Unsecured SPA whereby FFVV will invest another $20,000,000 in New
Notes (defined below) subject to terms substantially identical to those provided in the Unsecured SPA (in effect as of the date of the
FFVV Joinder, including, without limitation, the funding date timeline).
Pursuant to the FFVV Joinder, FFVV agreed to purchase,
under the Unsecured SPA, Unsecured Notes in an aggregate principal amount of up to $40,000,000 (collectively, the “New Notes”)
in installments, as follows: (i) $5 million in principal amount under the New Notes within five business days after the satisfaction of
the closing conditions described below (the “Closing Conditions”) or such earlier business day as designated by FFVV by notice
to the Company (the “First Closing”); (ii) $5 million in principal amount under the New Notes within 15 business days after
the First Closing (the “Second Closing”); (iii) $5 million in principal amount under the New Notes within 15 business days
after the Second Closing (the “Third Closing”); (iv) $5 million in principal amount under the New Notes within 15 business
days after the satisfaction of the Closing Conditions (the “Fourth Closing”); (v) $5 million in principal amount under the
New Notes within 15 business days after the Fourth Closing (the “Fifth Closing”); (vi) $5 million in principal amount under
the New Notes within 15 business days after the Fifth Closing (the “Sixth Closing”); (vii) $5 million in principal amount
under the New Notes within 15 business days after the Sixth Closing (the “Seventh Closing”); and (viii) $5 million in principal
amount under the New Notes within 15 business days after the Seventh Closing (the “Eighth Closing,” and each of the First
Closing, the Second Closing, the Third Closing, the Fourth Closing, the Fifth Closing, the Sixth Closing, the Seventh Closing and the
Eighth Closing, a “Closing”).
The conversion price of the New Notes shall be $0.8925 subject to adjustment,
as set forth in the Unsecured SPA. The floor price of the New Notes and, as amended pursuant to the FFVV Joinder, for each of the notes
issued to FFSV (or its affiliates) under the Secured SPA, shall be $0.05 (as adjusted for stock splits, stock dividends, stock combinations,
recapitalizations or other similar transactions occurring thereafter) (or such lower amount as may be permitted under Nasdaq rules from
time to time).
The terms and conditions of the New Notes cannot
be amended, modified, supplemented or amended and restated without the consent of FFVV .
The funding at each Closing is subject to the
following Closing Conditions: (a) an effective registration statement with respect to the shares of Common Stock issuable upon exercise
of the warrants issuable under the Unsecured SPA and the shares of Common Stock issued and issuable pursuant to the terms of the New Notes
(including, without limitation, shares of Common Stock issued and issuable in lieu of the cash payment of interest on the New Notes in
accordance with the terms thereof) (collectively, the “Underlying Shares”) for such Closing and (b) the Company shall have
reserved the Required Reserve Amount (defined below) in full as of such Closing Date.
Pursuant to the FFVV Joinder, FFVV may not convert any New Notes to
the extent that such conversion would result to FFVV, together with its affiliates and other persons acting as a group together FFVV,
would beneficially own in excess of 4.99% of the number of the shares of Common Stock outstanding prior to giving effect to such conversion
(the “Notes Beneficial Ownership Limitation”). Upon notice to the Company, FFVV may increase or decrease the Notes Beneficial
Ownership Limitation, provided it shall not exceed 4.99% of the number of shares of Common Stock outstanding after giving effect to such
conversion. In addition, pursuant to the FFVV Joinder, the warrants issued to FFVV in connection with the New Notes shall be subject to
a beneficial ownership limitation (the “Warrants Beneficial Ownership Limitation”) that is 4.99% of the number of shares of
the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon the exercise of such
warrant, which Warrants Beneficial Ownership Limitation may also increase or decrease provided it shall not exceed 4.99% 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 such
warrant, subject to the provision of the warrant.
In addition, pursuant to the FFVV Joinder, the
Unsecured SPA was further amended to provide that each Unsecured SPA Purchaser and FFVV has the option, upon written notice to the Company,
to purchase from time to time for 12 months from May 8, 2023 and from June 25, 2023, respectively, additional convertible senior unsecured
notes and warrants on the same terms as the New Notes (the “Additional Notes”), in an amount not to exceed 50% or 100% (the
latter with the prior written consent of the Company) of the initial principal amount of the Unsecured Notes issued to such purchaser
pursuant to Section 2.1(a) of the Unsecured SPA and purchased for cash.
Pursuant to the FFVV Joinder, the Company’s
lack of sufficient authorized or registered shares to serve as Underlying Shares for the Notes and related Warrants (as defined in each
of the Secured SPA and Unsecured SPA, respectively) is not deemed a breach of the Secured SPA, Unsecured SPA and related notes and warrants,
as a result thereof. However, at any time any Tranche A Notes, Tranche B Notes, Tranche C Notes or Tranche D Notes remain outstanding
(and any New Notes, Additional Notes and/or New Exchange Notes then outstanding or then issuable in connection with a transaction in which
such determination is being made) (collectively, the “Applicable Notes”), the Company shall use reasonable best efforts to
at all times have authorized, and reserved for the purpose of issuance, no less than 100% of the maximum number of shares of Common Stock
issuable upon conversion of all the Applicable Notes then outstanding and any New Notes, Additional Notes and/or New Exchange Notes then
issuable in connection with a transaction in which such determination is being made (assuming for purposes hereof that any conversion
of any Applicable Note shall not take into account any limitations on the conversion of such Applicable Note), (collectively, the “Required
Reserve Amount”). The Required Reserved Amount shall not be reduced other than proportionally in connection with any conversion,
exchange and/or redemption, as applicable. If the Company lacks shares sufficient to meet the Required Reserved Amount, it shall use reasonable
best efforts to promptly take all corporate action necessary to authorize and reserve a sufficient number of shares, including, without
limitation, calling a special meeting of stockholders and obtain stockholder approval to increase the Company’s authorized number
of shares of Common Stock, and voting the management shares of the Company in favor of such an increase.
Pursuant to the FFVV Joinder, and in accordance
with the provisions of the Secured SPA and Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”),
FFVV agreed, on behalf of its affiliates, that after the date of the FFVV Joinder, FFSV may deliver written notice (each, an “Exchange
Notice”, and the date of such applicable Exchange Notice, each, an “Exchange Date”) to exchange (each, an “Exchange”)
any Tranche B Notes, in whole or in part (each, an “Exchanging Note,” and such outstanding amounts thereunder, each, an “Exchanging
Amount”), for either (x) Tranche D Notes (as defined in the Secured SPA), and/or (y) for any Additional Note under the Unsecured
SPA, as applicable, (as set forth in such applicable Exchange Notice, each a “New Exchange Note,” and as converted, each a
“New Exchange Conversion Share”). Each Exchange shall automatically be deemed to be consummated on the corresponding Exchange
Date and, upon the delivery of such Exchange Notice, FFSV shall automatically be deemed to have exchanged the applicable Exchanging Amount
of the applicable Exchanging Note for a New Exchange Note with an aggregate amount outstanding equal to the Exchanging Amount. The Company
shall deliver a convertible note certificate evidencing such New Exchange Note to FFSV (or its designee) by no later than the fourth trading
day after the Exchange Date (or such other date agreed upon by FFSV and the Company). On such Exchange Date, FFSV shall automatically
be deemed to be the holder of such New Exchange Note, with full power to convert, redeem or otherwise enforce the terms and conditions
of the New Exchange Note on or after such Exchange Date, whether or not the Company shall have delivered the convertible note certificate
evidencing such New Exchange Note to FFSV (or its designee) on or prior to such date of determination. The consummation of an Exchange
shall reduce FFSV’s optionality for Tranche D Notes and/or Additional Notes, as applicable, under the Secured SPA or Unsecured SPA,
respectively, as applicable, for such corresponding Exchanging Amount and restore such optionality for the Tranche B Notes in accordance
with the terms of the Secured SPA in effect as of the date of the FFVV Joinder.
Assuming FFSV is not then considered an “affiliate”
of the Company under applicable rules, the holding period of the New Exchange Notes (and upon conversion of the New Exchange Notes, the
New Exchange Conversion Shares) shall commence at the original issuance of such corresponding Exchanging Note and shall not be re-set
in connection with such applicable Exchange. For the avoidance of doubt, and for purposes of Rule 144, the Company acknowledged and agreed
that the holding period of the New Exchange Notes (and upon conversion of the New Exchange Notes, the New Exchange Conversion Shares)
may be tacked onto the holding period of the Exchanging Notes, and the Company agreed not to take a contrary position.
In the FFVV Joinder, the Company represented and warranted to FFSV
that (i) no brokerage or finder’s fees or commission were or will be payable by the Company or any of its subsidiaries in connection
with the Exchange, the applicable Exchange Amount of the Exchanging Note being the sole consideration conveyed to the Company for the
New Exchange Note (and upon conversion of such New Exchange Note, the New Exchange Conversion Shares) and no other consideration has or
will be paid for such New Exchange Note; (ii) the Company has not, nor has any person acting on its behalf, directly or indirectly made
any offers or sales of any security or solicited any offers to buy any security under circumstances that would cause the Exchange and
the issuance of the applicable New Exchange Note (and upon conversion of such New Exchange Notes, the New Exchange Conversion Shares)
pursuant to such Exchange to be integrated with prior offerings by the Company for purposes of the Securities Act, which would prevent
the Company from delivering such applicable New Exchange Note (and upon conversion of such New Exchange Note, the New Exchange Conversion
Shares) pursuant to Section 3(a)(9) of the Securities Act, and the Company will not cause the applicable Exchange, issuance and delivery
of such New Exchange Note (and upon conversion of such New Exchange Note, the New Exchange Conversion Shares) to be integrated with other
offerings to the effect that the delivery of such New Exchange Note (and upon conversion of such New Exchange Note, the New Exchange Conversion
Shares) to FFSV would be seen not to be exempt pursuant to Section 3(a)(9) of the 1933 Act; and (iii) other than legal counsel, the Company
has not (and will not have) engaged any third parties to assist in the solicitation with respect to the Exchange.
Pursuant to the FFVV Joinder, the Company agreed
to pay FFVV a one-time $300,000 working fee and legal fees not to exceed $350,000, which shall be paid by netting the purchase price for
any New Notes with the amount of such fees.
On June 26, 2023, Senyun International Ltd.
(“Senyun”) executed a Second Joinder and Amendment Agreement (the “Senyun Joinder”), pursuant to which,
Senyun or a permitted assign agreed to exercise its option to purchase $15,000,000 of Tranche A Notes in accordance with the terms
of the Secured SPA, with funding of 75% of such amount within five business days of the date of the Senyun Joinder and the remaining
25% of such amount within three business days thereafter, subject to the satisfaction of the same Tranche B Closing Conditions as
described above. If Senyun exercises its option to invest another $10,000,000 of Tranche
A and/or B Notes in accordance with the terms of the Secured SPA on or prior to the later of (x) August 1, 2023 or (y) four business days
after the meeting of the Company’s stockholders for the Stockholder Approval, then the Company agrees to subsequently amend the
Unsecured SPA whereby Senyun will invest another $20,000,000 in New Notes subject to terms substantially identical to those provided in
the Unsecured SPA (in effect as of the date of the Senyun Joinder, including, without limitation, the funding date timeline).
Pursuant to the Senyun Joinder, Senyun agreed
to purchase, under the Unsecured SPA, Unsecured Notes (the “New Senyun Notes”) in an aggregate principal amount of up to $30,000,000
in installments of $3.75 million at each of the eight Closing dates. The floor price of the New Senyun Notes pursuant to the Senyun Joinder,
and as amended pursuant to the Senyun Joinder, for each notes issued to Senyun (or its affiliates) under the Secured SPA, shall be $0.05
(as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions occurring thereafter).
The other material terms of the Senyun Joinder
are the same as those set forth in the FFVV Joinder described above, except (i) the applicable Notes Beneficial Ownership Limitation and
Warrants Beneficial Ownership Limitation pursuant to the Senyun Joinder are each 9.99% (instead of 4.99%, in each case, set forth in the
FFVV Joinder), (ii) Senyun retained any right to preserve any potential dispute with regards to a conversion request that was sent to
the Company in May 2023, and (iii) the one-time working fee and legal fees that the Company agreed to pay to Senyun were $225,000 and
up to $262,500, respectively.
On June 26, 2023, the Unsecured SPA Purchasers
executed a letter consent to the FFVV Joinder and Senyun Joinder, and agreed specifically to Section 17 of each of the FFVV Joinder and
Senyun Joinder, which states that (i) each shall not otherwise trigger any adjustment to the conversion or exercise price of the notes
and warrants under the Secured SPA and Unsecured SPA, and (ii) that each of Senyun, FF Simplicity Ventures LLC and FF Prosperity Ventures
LLC waived any such rights to any adjustment to the conversion or exercise price in each of the Secured SPA and/or the Unsecured SPA,
as applicable, and the related notes and warrant.
The foregoing description of Amendment No. 1,
the FFVV Joinder and the Senyun Joinder does not purport to be complete and is qualified in its entirety by the full text of the Forms
of Common Stock Purchase Warrant, Amendment No. 1, FFVV Joinder, Senyun Joinder and Forms of New Notes filed as Exhibits 4.1, 4.2,
10.1, 10.2, 10.3 10.4 and 10.5 to this Current Report on Form 8-K and incorporated herein by reference.
The information set forth under Item 1.01 above is incorporated into
this Item 2.03 by reference.
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: June 27, 2023 |
By: |
/s/ Yun Han |
|
Name: |
Yun Han |
|
Title: |
Interim Chief Financial Officer and Chief Accounting Officer |
Exhibit 4.1
Form of Unsecured Warrant
NEITHER THIS SECURITY NOR THE SECURITIES FOR
WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS 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: [__] |
Initial Exercise Date: [__], 2023 |
THIS COMMON STOCK PURCHASE
WARRANT (the “Warrant”) certifies that, for value received, [__] or its permitted assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after
the date hereof (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on [__], 20[__]1
(the “Termination Date”) but not thereafter, to subscribe for and purchase from Faraday Future Intelligent Electric
Inc., a Delaware corporation (the “Company”), up to [__] shares of Common Stock (as defined below) (as subject to
adjustment hereunder, the “Warrant Shares”) of Common Stock; the purchase price of one share of Common Stock under
this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
Section 1. Definitions.
In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated in this Section 1:
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Board
of Directors” means the board of directors of the Company.
| 1 | Note to Draft: To be seven (7) years after the date of
issuance of the applicable Warrant. |
“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized
or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee”
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority
so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally
are open for use by customers on such day.
“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.
“Excluded
Stock” means the issuance of (a) shares of Common Stock or options to consultants, employees, officers or directors of the
Company pursuant to any stock or option plan duly adopted for such purpose, by a majority of the members of the Board of Directors of
the Company or a majority of the members of a committee of directors established for such purpose for services rendered to the Company,
(b) securities upon the exercise or exchange of or conversion of any Warrant Shares issued hereunder and/or other securities exercisable
or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Warrant, provided that such
securities have not been amended since the date of this Warrant to increase the number of such securities or to decrease the exercise
price, exchange price or conversion price of such securities (other than in connection with stock splits or combinations) or to extend
the term of such securities, (c) securities issued pursuant to mergers, acquisitions, joint ventures or strategic transactions approved
by a majority of the disinterested directors of the Company provided that any such issuance pursuant to this clause (c) shall only be
to a Person or Persons (or to the equityholders of a Person or Persons) which is, itself or through its subsidiaries, an operating company
or an owner of an asset and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include
a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business
is investing in securities, (d) any shares of Common Stock or securities exercisable or exchangeable for or convertible into shares of
Common Stock in an aggregate amount not to exceed $50,000,000 (excluding any Notes or Warrants issued under the Purchase Agreement) after
the date of the Purchase Agreement; provided, that with respect to this clause (d), the issuance, conversion or exercise (as applicable)
price per share at the time of issuance of such Common Stock or security (as applicable) is not less than $0.55 per share of Common Stock
(as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions occurring after the
date hereof), and (e) the issuance of the Tranche A and B Notes and Warrants under the Purchase Agreement and the shares of Common Stock
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.
“Proceeding”
means an action, claim, suit, or proceeding.
“Purchase
Agreement” means that certain Amended and Restated Securities Purchase Agreement, dated as of February 3, 2023, among the Company,
the various financial institutions as are, or may from time to time become, party thereto as issuers and lenders (including without limitation
Holder) and FF Simplicity Ventures LLC, as administrative and collateral agent, as the same may be amended, restated, amended and restated,
supplemented or otherwise modified from time to time.
“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.
“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.
“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 Initial Exercise Date and on or before the Termination Date, after receipt of Company stockholder
approval to increase the Company’s authorized and uncommitted shares of Class A Common Stock to the extent needed (which
approval, for the avoidance of doubt, may be implemented by the Issuer through a reverse stock split that increases the number of
authorized shares of the Issuer’s Class A Common Stock) and for purposes of NASDAQ Listing Rule 5635 to the extent needed (the
“Shareholder Approval”) (and the filing of an amendment to the certificate of incorporation of the Company to
reflect the Shareholder Approval to the extent needed) and subject to Section 2(f) in each case unless otherwise consented to in
writing by the Company, 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 unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable
Notice of Exercise (except as set forth in the preceding sentence). 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 per share of Common Stock under this Warrant shall be $0.8925, subject to adjustment hereunder (the
“Exercise Price”).
c) Cashless
Exercise. This Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in
which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by
(A), where:
|
(A) = |
as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise, or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day; |
|
(B) = |
the Exercise Price of this Warrant, as adjusted hereunder; and |
|
(X) = |
the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise. |
If (A-B) is less than zero, then the
number of Warrant Shares to be delivered to the Holder shall equal zero. If Warrant Shares are issued in such a cashless exercise, the
parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the holding period of the Warrant Shares
being issued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section
2(c).
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) this Warrant is being exercised via cashless exercise, 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 two (2) Trading Days 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 (other than in case of a cashless exercise) is received
within two (2) Trading Days following delivery of the Notice of Exercise. If the Company is then a participant in DWAC 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) this Warrant is being exercised via cashless exercise 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.
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.
vii. Closing
of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
e) Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to
exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance
after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any
other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons,
“Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined
below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its
Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with
respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable
upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates
or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities 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 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common
Stock issuable upon the 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
4.99% 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.
f) Issuance
Restrictions. If the Company has not obtained Shareholder Approval to the extent needed, then the Company may not issue upon exercise
of this Warrant any shares of Common Stock.
g) Call
Provision. Subject to the provisions of Section 2(e), Section 2(f) and this Section 2(g), if, after the Effective Date, (i) the
VWAP for each of 20 Trading Days out of 30 consecutive Trading Days (the “Measurement Period,” which 30
consecutive Trading Day period shall not have commenced until after the Effective Date) exceeds $15.00 (subject to adjustment for
forward and reverse stock splits, recapitalizations, stock dividends and the like after the Initial Exercise Date), (ii) the Holder
is not in possession of any information that constitutes, or might constitute, material non-public information which was provided by
the Company, any of its Subsidiaries, or any of their officers, directors, employees, agents or Affiliates, and (iii) the Equity
Conditions are then satisfied, then the Company may, within 1 Trading Day of the end of such Measurement Period, call for
cancellation of all or any portion of this Warrant for which a Notice of Exercise has not yet been delivered (such right, a
“Call”) for consideration equal to $0.01 per Warrant Share. To exercise this right, the Company must deliver to
the Holder an irrevocable written notice (a “Call Notice”), indicating therein the portion of unexercised portion
of this Warrant to which such notice applies. If the conditions set forth below for such Call are satisfied from the period from the
date of the Call Notice through and including the Call Date (as defined below), then any portion of this Warrant subject to such
Call Notice for which a Notice of Exercise shall not have been received by the Call Date will be cancelled at 6:30 p.m. (New York
City time) on the tenth Trading Day after the date the Call Notice is received by the Holder (such date and time, the “Call
Date”). Any unexercised portion of this Warrant to which the Call Notice does not pertain will be unaffected by such Call
Notice. In furtherance thereof, the Company covenants and agrees that it will honor all Notices of Exercise with respect to Warrant
Shares subject to a Call Notice that are tendered through 6:30 p.m. (New York City time) on the Call Date. The parties agree that
any Notice of Exercise delivered following a Call Notice which calls less than all of the Warrants shall first reduce to zero the
number of Warrant Shares subject to such Call Notice prior to reducing the remaining Warrant Shares available for purchase under
this Warrant. For example, if (A) this Warrant then permits the Holder to acquire 100 Warrant Shares, (B) a Call Notice pertains to
75 Warrant Shares, and (C) prior to 6:30 p.m. (New York City time) on the Call Date the Holder tenders a Notice of Exercise in
respect of 50 Warrant Shares, then (x) on the Call Date the right under this Warrant to acquire 25 Warrant Shares will be
automatically cancelled, (y) the Company, in the time and manner required under this Warrant, will have issued and delivered to the
Holder 50 Warrant Shares in respect of the exercises following receipt of the Call Notice, and (z) the Holder may, until the
Termination Date, exercise this Warrant for 25 Warrant Shares (subject to adjustment as herein provided and subject to subsequent
Call Notices). Subject again to the provisions of this Section 2(g), the Company may deliver subsequent Call Notices for any portion
of this Warrant for which the Holder shall not have delivered a Notice of Exercise. Notwithstanding anything to the contrary set
forth in this Warrant, the Company may not deliver a Call Notice or require the cancellation of this Warrant (and any such Call
Notice shall be void), unless, from the beginning of the Measurement Period through the Call Date, (1) the Company shall have
honored in accordance with the terms of this Warrant all Notices of Exercise delivered by 6:30 p.m. (New York City time) on the Call
Date, and (2) the Registration Statement shall be effective as to all Warrant Shares and the prospectus thereunder available for use
by the Holder, or Rule 144 shall be available without time, volume or manner of sale limitations, for the resale of all such Warrant
Shares, (3) the Common Stock shall be listed or quoted for trading on the Trading Market, and (4) there is a sufficient number of
authorized shares of Common Stock for issuance of all Securities under the Transaction Documents, and (5) the issuance of all
Warrant Shares subject to a Call Notice shall not cause a breach of any provision of Section 2(e) or Section 2(f) herein. The
Company’s right to call the Warrants under this Section 2(g) shall be exercised ratably among the Holders based on each
Holder’s initial purchase of Warrants.
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) Subsequent
Equity Sales. If the Company or any Subsidiary thereof, as applicable, at any time while this Warrant is outstanding, shall
sell, enter into an agreement to sell or grant any option to purchase, or sell or grant any right to reprice, or otherwise dispose
of or issue any Common Stock or Common Stock Equivalents (other than Excluded Stock), at an effective price per share less than the
Exercise Price then in effect (such issuances collectively, a “Dilutive Issuance” and such price, the
“Base Price”)) (it being understood and agreed that if the holder of the Common Stock or Common Stock Equivalents
so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or
exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be
entitled to receive shares of Common Stock at an effective price per share that is less than the Exercise Price, such issuance shall
be deemed to have occurred for less than the Exercise Price on such date of the Dilutive Issuance at such effective price), then
simultaneously with the consummation of each Dilutive Issuance the Exercise Price shall be reduced and only reduced to equal the
Base Price. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued. Notwithstanding the
foregoing, no adjustments shall be made, paid or issued under this Section 3(b) in respect of Excluded Stock or any adjustment
pursuant to Section 3(a). The Company shall notify the Holder, in writing, no later than the Trading Day following the issuance or
deemed issuance of any Common Stock or Common Stock Equivalents subject to this Section 3(b), indicating therein the applicable
issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice, the
“Dilutive Issuance Notice”). For purposes of clarification, whether or not the Company provides a Dilutive
Issuance Notice pursuant to this Section 3(b), upon the occurrence of any Dilutive Issuance, the Holder is entitled to receive a
number of Warrant Shares based upon the adjusted Exercise Price regardless of whether the Holder accurately refers to the adjusted
Exercise Price in the Notice of Exercise. Notwithstanding anything herein to the contrary, for purposes of this Section 2(b),
“effective price per share” shall take into consideration the value of any Common Stock, Common Stock Equivalents,
securities transferred to a third-party by other stockholders of the Company including Common Stock or Common Stock Equivalents,
cash, rights or any other form of additional consideration (“Secondary Security”) that is issued or paid in
connection with the issuance or sale or deemed issuance or sale of any other securities of the Company (the “Primary
Security”, and together with the Secondary Security, each a “Unit”), together comprising one integrated
transaction (or series of related transactions if such issuances or sales or deemed issuances or sales of securities of the Company
are consummated under the same plan of financing), the “effective price per share” (i.e. Base Price) shall be deemed to
be the lowest of (y) if such Primary Security is a Common Stock Equivalent, the lowest price per share for which one share of Common
Stock is at any time issuable upon the exercise or conversion of the Primary Security and (z) the purchase price of such Unit less
the value of the Secondary Unit (assuming for such purposes the value of any options or warrants are valued at the Black Scholes
Value but using the date of the Dilutive Issuance for such purposes rather than the date of the Fundamental Transaction); provided,
that if the value determined pursuant to clause (y) above would result in a value less than the par value of the Common Stock, then
the other securities issued or sold in such integrated transaction shall be deemed to have been issued or sold for the par value of
the Common Stock. If any shares of Common Stock or Common Stock Equivalents are issued or sold or deemed to have been issued or sold
for cash, the consideration other than cash received therefor will be deemed to be the net amount received by the Company therefor.
If any shares of Common Stock or Common Stock Equivalents are issued or sold for a consideration other than cash, the amount of such
consideration received by the Company will be the fair value of such consideration, except where such consideration consists of
publicly traded securities or Common Stock (including Common Stock transferred from existing third-party stockholder), in which case
the amount of consideration received by the Company will be the volume weighted average price of such publicly traded securities on
the date of receipt of such publicly traded securities. The fair value of any consideration other than cash or publicly traded
securities will be reasonably and in good faith determined jointly by the Company and the Holder. If such parties are unable to
reach agreement within ten (10) days after the occurrence of an event requiring valuation (the “Valuation Event”),
the fair value of such consideration will be determined within five (5) Business Days after the tenth (10th) day
following the Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Holder acting
reasonable and in good faith. 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 equally by the Company and the Holder.
(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.
a) 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.
b) Notice
to Holder.
i. Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall
promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment
to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii. Notice
to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common
Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall
authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock
of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification
of the Common Stock, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer of
all or substantially all of its assets, or any compulsory share exchange whereby the Common Stock is converted into other securities,
cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as it shall
appear upon the Warrant Register of the Company, at least 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.
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 unless otherwise
consented to in writing by the Company, 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.
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). Without limiting any rights of a Holder to
receive Warrant Shares on a “cashless exercise” pursuant to Section 2(c), in no event shall the Company be required to net
cash settle an exercise of this Warrant.
b) Loss,
Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any 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, during the period the Warrant is outstanding and after receipt of Shareholder Approval (and the filing of an amendment to the certificate
of incorporation of the Company reflecting the Shareholder Approval to the extent needed), it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights
under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who
are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company
will use commercially reasonable efforts to assure that such Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants
that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise
of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly
issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof
(other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except and to the
extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate
of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, 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 action as may be reasonably necessary or appropriate
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.
Before taking any
action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price,
the Company shall 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 decisionmaking 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. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and
construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict of
laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of this Warrant shall
be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”).
Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement
of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any
claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient
venue for such proceeding. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all
right to trial by jury in any legal proceeding arising out of or relating to this Warrant. If any party shall commence an action or proceeding
to enforce any provisions of this Warrant, then the prevailing party in such action or proceeding shall be reimbursed by the other party
for its attorneys’ fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action
or proceeding.
g) Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered and the Holder does not
utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
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.
i) 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, Mike Beck, email address david.beck@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.
j) Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase
price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the
Company.
k) Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to 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.
l) Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder.
The provisions of this Warrant are intended to be for the benefit of any permitted Holder from time to time of this Warrant and shall
be enforceable by such Holder or holder of Warrant Shares.
m) Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.
n) Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
o) Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this
Warrant.
********************
(Signature Page Follows)
Form of Unsecured Warrant
IN WITNESS WHEREOF, the Company
has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
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faraday future intelligent electric inc. |
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By: |
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Name: |
Yun Han |
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Title: |
Chief Accounting Officer and Interim
Chief Financial Officer |
Signature Page to Warrant
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):
☐ lawful
money of the United States; or
☐ [if
permitted] the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection
2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure
set forth in subsection 2(c).
(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: ________________________________________________________________________________________
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: ______________, _______
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Holder’s Signature: |
_____________________________ |
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_____________________________ |
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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.
Exhibit 4.2
Form of Unsecured Warrant
NEITHER THIS SECURITY NOR THE SECURITIES FOR
WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS 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: [__] |
Initial Exercise Date: [__], 2023 |
THIS COMMON STOCK PURCHASE
WARRANT (the “Warrant”) certifies that, for value received, [__] or its permitted assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after
the date hereof (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on [__], 20[__]1
(the “Termination Date”) but not thereafter, to subscribe for and purchase from Faraday Future Intelligent Electric
Inc., a Delaware corporation (the “Company”), up to [__] shares of Common Stock (as defined below) (as subject to
adjustment hereunder, the “Warrant Shares”) of Common Stock; the purchase price of one share of Common Stock under
this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
Section 1. Definitions.
In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated in this Section 1:
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Board
of Directors” means the board of directors of the Company.
1
Note to Draft: To be seven (7) years after the date of issuance of the applicable Warrant.
“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized
or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee”
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority
so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally
are open for use by customers on such day.
“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.
“Excluded
Stock” means the issuance of (a) shares of Common Stock or options to consultants, employees, officers or directors of the
Company pursuant to any stock or option plan duly adopted for such purpose, by a majority of the members of the Board of Directors of
the Company or a majority of the members of a committee of directors established for such purpose for services rendered to the Company,
(b) securities upon the exercise or exchange of or conversion of any Warrant Shares issued hereunder and/or other securities exercisable
or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Warrant, provided that such
securities have not been amended since the date of this Warrant to increase the number of such securities or to decrease the exercise
price, exchange price or conversion price of such securities (other than in connection with stock splits or combinations) or to extend
the term of such securities, (c) securities issued pursuant to mergers, acquisitions, joint ventures or strategic transactions approved
by a majority of the disinterested directors of the Company provided that any such issuance pursuant to this clause (c) shall only be
to a Person or Persons (or to the equityholders of a Person or Persons) which is, itself or through its subsidiaries, an operating company
or an owner of an asset and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include
a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business
is investing in securities, (d) any shares of Common Stock or securities exercisable or exchangeable for or convertible into shares of
Common Stock in an aggregate amount not to exceed $50,000,000 (excluding any Notes or Warrants issued under the Purchase Agreement) after
the date of the Purchase Agreement; provided, that with respect to this clause (d), the issuance, conversion or exercise (as applicable)
price per share at the time of issuance of such Common Stock or security (as applicable) is not less than $0.55 per share of Common Stock
(as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions occurring after the
date hereof), and (e) the issuance of the Tranche A and B Notes and Warrants under the Purchase Agreement and the shares of Common Stock
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.
“Proceeding”
means an action, claim, suit, or proceeding.
“Purchase
Agreement” means that certain Amended and Restated Securities Purchase Agreement, dated as of February 3, 2023, among the Company,
the various financial institutions as are, or may from time to time become, party thereto as issuers and lenders (including without limitation
Holder) and FF Simplicity Ventures LLC, as administrative and collateral agent, as the same may be amended, restated, amended and restated,
supplemented or otherwise modified from time to time.
“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.
“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.
“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 Initial Exercise Date and on or before the Termination Date, after receipt of Company stockholder
approval to increase the Company’s authorized and uncommitted shares of Class A Common Stock to the extent needed (which
approval, for the avoidance of doubt, may be implemented by the Issuer through a reverse stock split that increases the number of
authorized shares of the Issuer’s Class A Common Stock) and for purposes of NASDAQ Listing Rule 5635 to the extent needed (the
“Shareholder Approval”) (and the filing of an amendment to the certificate of incorporation of the Company to
reflect the Shareholder Approval to the extent needed) and subject to Section 2(f) in each case unless otherwise consented to in
writing by the Company, 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 unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable
Notice of Exercise (except as set forth in the preceding sentence). 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 per share of Common Stock under this Warrant shall be $0.8925, subject to adjustment hereunder (the
“Exercise Price”).
c) Cashless
Exercise. This Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in
which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by
(A), where:
|
(A) = |
as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise, or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day; |
|
(B) = |
the Exercise Price of this Warrant, as adjusted hereunder; and |
|
(X) = |
the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise. |
If (A-B) is less than zero, then the
number of Warrant Shares to be delivered to the Holder shall equal zero. If Warrant Shares are issued in such a cashless exercise, the
parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the holding period of the Warrant Shares
being issued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section
2(c).
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) this Warrant is being exercised via cashless exercise, 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 two (2) Trading Days 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 (other than in case of a cashless exercise) is received
within two (2) Trading Days following delivery of the Notice of Exercise. If the Company is then a participant in DWAC 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) this Warrant is being exercised via cashless exercise 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.
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.
vii. Closing
of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
e) Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise
any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise
as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting
as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)),
would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence,
the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number
of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude
the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant
beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or
nonconverted portion of any other securities 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 the 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.
f) Issuance
Restrictions. If the Company has not obtained Shareholder Approval to the extent needed, then the Company may not issue upon exercise
of this Warrant any shares of Common Stock.
g) Call
Provision. Subject to the provisions of Section 2(e), Section 2(f) and this Section 2(g), if, after the Effective Date, (i) the
VWAP for each of 20 Trading Days out of 30 consecutive Trading Days (the “Measurement Period,” which 30
consecutive Trading Day period shall not have commenced until after the Effective Date) exceeds $15.00 (subject to adjustment for
forward and reverse stock splits, recapitalizations, stock dividends and the like after the Initial Exercise Date), (ii) the Holder
is not in possession of any information that constitutes, or might constitute, material non-public information which was provided by
the Company, any of its Subsidiaries, or any of their officers, directors, employees, agents or Affiliates, and (iii) the Equity
Conditions are then satisfied, then the Company may, within 1 Trading Day of the end of such Measurement Period, call for
cancellation of all or any portion of this Warrant for which a Notice of Exercise has not yet been delivered (such right, a
“Call”) for consideration equal to $0.01 per Warrant Share. To exercise this right, the Company must deliver to
the Holder an irrevocable written notice (a “Call Notice”), indicating therein the portion of unexercised portion
of this Warrant to which such notice applies. If the conditions set forth below for such Call are satisfied from the period from the
date of the Call Notice through and including the Call Date (as defined below), then any portion of this Warrant subject to such
Call Notice for which a Notice of Exercise shall not have been received by the Call Date will be cancelled at 6:30 p.m. (New York
City time) on the tenth Trading Day after the date the Call Notice is received by the Holder (such date and time, the “Call
Date”). Any unexercised portion of this Warrant to which the Call Notice does not pertain will be unaffected by such Call
Notice. In furtherance thereof, the Company covenants and agrees that it will honor all Notices of Exercise with respect to Warrant
Shares subject to a Call Notice that are tendered through 6:30 p.m. (New York City time) on the Call Date. The parties agree that
any Notice of Exercise delivered following a Call Notice which calls less than all of the Warrants shall first reduce to zero the
number of Warrant Shares subject to such Call Notice prior to reducing the remaining Warrant Shares available for purchase under
this Warrant. For example, if (A) this Warrant then permits the Holder to acquire 100 Warrant Shares, (B) a Call Notice pertains to
75 Warrant Shares, and (C) prior to 6:30 p.m. (New York City time) on the Call Date the Holder tenders a Notice of Exercise in
respect of 50 Warrant Shares, then (x) on the Call Date the right under this Warrant to acquire 25 Warrant Shares will be
automatically cancelled, (y) the Company, in the time and manner required under this Warrant, will have issued and delivered to the
Holder 50 Warrant Shares in respect of the exercises following receipt of the Call Notice, and (z) the Holder may, until the
Termination Date, exercise this Warrant for 25 Warrant Shares (subject to adjustment as herein provided and subject to subsequent
Call Notices). Subject again to the provisions of this Section 2(g), the Company may deliver subsequent Call Notices for any portion
of this Warrant for which the Holder shall not have delivered a Notice of Exercise. Notwithstanding anything to the contrary set
forth in this Warrant, the Company may not deliver a Call Notice or require the cancellation of this Warrant (and any such Call
Notice shall be void), unless, from the beginning of the Measurement Period through the Call Date, (1) the Company shall have
honored in accordance with the terms of this Warrant all Notices of Exercise delivered by 6:30 p.m. (New York City time) on the Call
Date, and (2) the Registration Statement shall be effective as to all Warrant Shares and the prospectus thereunder available for use
by the Holder, or Rule 144 shall be available without time, volume or manner of sale limitations, for the resale of all such Warrant
Shares, (3) the Common Stock shall be listed or quoted for trading on the Trading Market, and (4) there is a sufficient number of
authorized shares of Common Stock for issuance of all Securities under the Transaction Documents, and (5) the issuance of all
Warrant Shares subject to a Call Notice shall not cause a breach of any provision of Section 2(e) or Section 2(f) herein. The
Company’s right to call the Warrants under this Section 2(g) shall be exercised ratably among the Holders based on each
Holder’s initial purchase of Warrants.
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) Subsequent
Equity Sales. If the Company or any Subsidiary thereof, as applicable, at any time while this Warrant is outstanding, shall
sell, enter into an agreement to sell or grant any option to purchase, or sell or grant any right to reprice, or otherwise dispose
of or issue any Common Stock or Common Stock Equivalents (other than Excluded Stock), at an effective price per share less than the
Exercise Price then in effect (such issuances collectively, a “Dilutive Issuance” and such price, the
“Base Price”)) (it being understood and agreed that if the holder of the Common Stock or Common Stock Equivalents
so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or
exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be
entitled to receive shares of Common Stock at an effective price per share that is less than the Exercise Price, such issuance shall
be deemed to have occurred for less than the Exercise Price on such date of the Dilutive Issuance at such effective price), then
simultaneously with the consummation of each Dilutive Issuance the Exercise Price shall be reduced and only reduced to equal the
Base Price. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued. Notwithstanding the
foregoing, no adjustments shall be made, paid or issued under this Section 3(b) in respect of Excluded Stock or any adjustment
pursuant to Section 3(a). The Company shall notify the Holder, in writing, no later than the Trading Day following the issuance or
deemed issuance of any Common Stock or Common Stock Equivalents subject to this Section 3(b), indicating therein the applicable
issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice, the
“Dilutive Issuance Notice”). For purposes of clarification, whether or not the Company provides a Dilutive
Issuance Notice pursuant to this Section 3(b), upon the occurrence of any Dilutive Issuance, the Holder is entitled to receive a
number of Warrant Shares based upon the adjusted Exercise Price regardless of whether the Holder accurately refers to the adjusted
Exercise Price in the Notice of Exercise. Notwithstanding anything herein to the contrary, for purposes of this Section 2(b),
“effective price per share” shall take into consideration the value of any Common Stock, Common Stock Equivalents,
securities transferred to a third-party by other stockholders of the Company including Common Stock or Common Stock Equivalents,
cash, rights or any other form of additional consideration (“Secondary Security”) that is issued or paid in
connection with the issuance or sale or deemed issuance or sale of any other securities of the Company (the “Primary
Security”, and together with the Secondary Security, each a “Unit”), together comprising one integrated
transaction (or series of related transactions if such issuances or sales or deemed issuances or sales of securities of the Company
are consummated under the same plan of financing), the “effective price per share” (i.e. Base Price) shall be deemed to
be the lowest of (y) if such Primary Security is a Common Stock Equivalent, the lowest price per share for which one share of Common
Stock is at any time issuable upon the exercise or conversion of the Primary Security and (z) the purchase price of such Unit less
the value of the Secondary Unit (assuming for such purposes the value of any options or warrants are valued at the Black Scholes
Value but using the date of the Dilutive Issuance for such purposes rather than the date of the Fundamental Transaction); provided,
that if the value determined pursuant to clause (y) above would result in a value less than the par value of the Common Stock, then
the other securities issued or sold in such integrated transaction shall be deemed to have been issued or sold for the par value of
the Common Stock. If any shares of Common Stock or Common Stock Equivalents are issued or sold or deemed to have been issued or sold
for cash, the consideration other than cash received therefor will be deemed to be the net amount received by the Company therefor.
If any shares of Common Stock or Common Stock Equivalents are issued or sold for a consideration other than cash, the amount of such
consideration received by the Company will be the fair value of such consideration, except where such consideration consists of
publicly traded securities or Common Stock (including Common Stock transferred from existing third-party stockholder), in which case
the amount of consideration received by the Company will be the volume weighted average price of such publicly traded securities on
the date of receipt of such publicly traded securities. The fair value of any consideration other than cash or publicly traded
securities will be reasonably and in good faith determined jointly by the Company and the Holder. If such parties are unable to
reach agreement within ten (10) days after the occurrence of an event requiring valuation (the “Valuation Event”),
the fair value of such consideration will be determined within five (5) Business Days after the tenth (10th) day
following the Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Holder acting
reasonable and in good faith. 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 equally by the Company and the Holder.
(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.
a) 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.
b) Notice
to Holder.
i. Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall
promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment
to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii. Notice
to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common
Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall
authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock
of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification
of the Common Stock, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer of
all or substantially all of its assets, or any compulsory share exchange whereby the Common Stock is converted into other securities,
cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as it shall
appear upon the Warrant Register of the Company, at least 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.
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 unless otherwise
consented to in writing by the Company, 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.
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). Without limiting any rights of a Holder to
receive Warrant Shares on a “cashless exercise” pursuant to Section 2(c), in no event shall the Company be required to net
cash settle an exercise of this Warrant.
b) Loss,
Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any 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, during the period the Warrant is outstanding and after receipt of Shareholder Approval (and the filing of an amendment to the certificate
of incorporation of the Company reflecting the Shareholder Approval to the extent needed), it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights
under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who
are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company
will use commercially reasonable efforts to assure that such Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants
that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise
of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly
issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof
(other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except and to the
extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate
of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, 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 action as may be reasonably necessary or appropriate
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.
Before taking any
action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price,
the Company shall 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 decisionmaking 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. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and
construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict of
laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of this Warrant shall
be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”).
Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement
of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any
claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient
venue for such proceeding. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all
right to trial by jury in any legal proceeding arising out of or relating to this Warrant. If any party shall commence an action or proceeding
to enforce any provisions of this Warrant, then the prevailing party in such action or proceeding shall be reimbursed by the other party
for its attorneys’ fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action
or proceeding.
g) Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered and the Holder does not
utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
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.
i) 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, Mike Beck, email address david.beck@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.
j) Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase
price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the
Company.
k) Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to 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.
l) Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder.
The provisions of this Warrant are intended to be for the benefit of any permitted Holder from time to time of this Warrant and shall
be enforceable by such Holder or holder of Warrant Shares.
m) Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.
n) Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
o) Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this
Warrant.
********************
(Signature Page Follows)
Form of Unsecured Warrant
IN WITNESS WHEREOF, the Company
has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
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faraday future intelligent electric inc. |
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By: |
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Name: |
Yun Han |
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Title: |
Chief Accounting Officer and Interim Chief Financial Officer |
Signature Page to Warrant
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):
[ ] lawful
money of the United States; or
[ ] [if
permitted] the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection
2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure
set forth in subsection 2(c).
(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: ________________________________________________________________________________________
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: ______________, _______
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Holder’s Signature: |
_____________________________ |
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Holder’s Address: |
_____________________________ |
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_____________________________ |
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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.
Exhibit 10.1
Execution Version
AMENDMENT NO. 1
June 26, 2023
Faraday Future Intelligent Electric Inc.
18455 South Figueroa Street
Gardena, California 90248
Attention: Legal Department, Mike Beck
Phone: (800) 228-7702
Email: david.beck@ff.com
Re: Amendment No. 1
Ladies and Gentlemen:
Reference is made to that
certain Securities Purchase Agreement dated as of May 8, 2023 (as the same may be amended, restated, amended and restated, supplemented
or otherwise modified from time to time, the “SPA”), by and among Faraday Future Intelligent Electric Inc., a Delaware
corporation (the “Issuer”) and the financial institutions or other entities from time to time parties thereto (each
a “Purchaser” and collectively, the “Purchasers”). Capitalized terms used but not defined herein
shall have the meanings set forth in the SPA. This Amendment No. 1 is referred to herein as this “Amendment No. 1”.
Each Purchaser party hereto hereby acknowledges
that Section 2.1(a)(i) of the SPA, shall be amended and restated to read in its entirety as follows:
“(i) Each Closing (as defined
in the Notes) shall take place as set forth in the Notes; provided that, notwithstanding anything to the contrary herein or in
the Notes, any Purchaser may postpone or cancel any Closing in its reasonable discretion if the Issuer has not issued a press release
or other public announcement confirming that the second phase of the Issuer’s three-phase delivery plan as disclosed in the Issuer’s
public filings has begun on or prior to August 31, 2023, within 15 calendar days of such deadline; and”
| a. | The provisions of this Amendment No. 1 shall become effective against each Purchaser upon the execution
and delivery by such Purchaser of a counterpart hereto and shall be effective against all Purchasers upon the execution and delivery of
counterparts hereto by the requisite number of Purchasers in accordance with the terms of the SPA. |
| b. | In order to induce the applicable Purchasers to enter into this Amendment No. 1, the Issuer hereby represents
and warrants to the applicable Purchasers, immediately after giving effect to this Amendment No. 1, as of the date hereof and in each
case, that all material non-public information regarding the Issuer that has been disclosed to the applicable Purchasers on or prior to
the date hereof, has been disclosed in the Issuer’s public filings with the Commission prior to the date hereof or will be disclosed
within one Business Day of such disclosure. |
| c. | Except as otherwise expressly provided herein, nothing contained herein shall constitute or be deemed
to be a waiver or amendment of, or consent to any departure from any other term or provision in the SPA or any other Financing Document,
each of which shall continue unmodified and in full force and effect, nor shall the foregoing consent and amendment constitute a course
of dealing among the parties. Except as specifically set forth herein, the Purchaser reserves all of its rights and remedies under the
SPA and the Financing Documents. |
| d. | On or before 9:00 a.m., New York time, on the
date of this Amendment No. 1, the Issuer shall file a Current Report on
Form 8-K describing all the material terms of the transactions contemplated hereby in the form required by the Securities Exchange Act
of 1934, as amended, and attaching the form of this Amendment No. 1 (including
all attachments, the “8-K Filing”). From and after the filing of the 8-K Filing, the Issuer shall have disclosed all material,
non-public information (if any) provided to each Purchaser by the Issuer or any of its Subsidiaries or any of their respective officers,
directors, employees or agents in connection with the transactions contemplated hereby. In addition, effective upon the filing of the
8-K Filing, 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, affiliates, employees or agents,
on the one hand, and each Purchaser or any of its affiliates, on the other hand, relating to the transactions contemplated by this Amendment
No. 1, shall terminate. |
| e. | This Amendment No. 1 may be executed in any number of counterparts and by different parties in separate
counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and
the same agreement. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart. Delivery
of an executed signature page of this Amendment No. 1 by facsimile transmission or electronic transmission shall be as effective as delivery
of a manually executed counterpart hereof. |
| f. | THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN ALL MATTERS ARISING OUT OF, IN CONNECTION WITH
OR RELATING TO THIS AMENDMENT NO. 1, INCLUDING, WITHOUT LIMITATION, ITS VALIDITY, INTERPRETATION, CONSTRUCTION, PERFORMANCE AND ENFORCEMENT,
WITHOUT REGARD TO CONFLICTS OF LAWS PROVISIONS OF SUCH STATE. |
- Remainder of page intentionally blank; signature
pages follow -
IN WITNESS WHEREOF, the parties hereto have
caused this Amendment No. 1 to be duly executed by their respective duly authorized officers on the date first written above
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ISSUER: |
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FARADAY FUTURE INTELLIGENT ELECTRIC INC. |
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By: |
/s/ Xuefeng Chen |
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Name: |
Xuefeng Chen |
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Title: |
Chief Executive Officer |
(Signature Page to Amendment No. 1)
IN WITNESS WHEREOF, the parties hereto have
caused this Amendment No. 1 to be duly executed by their respective duly authorized officers on the date first written above
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PURCHASER: |
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METAVERSE HORIZON LIMITED |
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By: |
/s/ ZHANG Maosheng |
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Name: |
ZHANG Maosheng |
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Title: |
Director |
(Signature Page to Amendment No. 1)
IN WITNESS WHEREOF, the parties hereto have
caused this Amendment No. 1 to be duly executed by their respective duly authorized officers on the date first written above
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PURCHASER: |
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V W INVESTMENT HOLDING LIMITED |
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By: |
/s/
Lijun Jin |
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Name: |
Lijun Jin |
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Title: |
Director |
(Signature Page to Amendment
No. 1)
Exhibit 10.2
JOINDER
AND AMENDMENT AGREEMENT
THIS JOINDER
AND AMENDMENT AGREEMENT (this “Agreement”) dated as of June 26, 2023, is executed by and among FF Vitality
Ventures LLC (the “New Purchaser”) and the Issuer.1
WHEREAS, reference is made
to the Securities Purchase Agreement, dated as of May 8, 2023 (as amended by that certain Amendment No. 1, dated as of June 26, 2023,
the “Existing Securities Purchase Agreement”; the Existing Securities Purchase Agreement, as further amended, restated,
amended and restated, supplemented or otherwise modified from time to time, including pursuant to this Agreement, the “Securities
Purchase Agreement”) by and among Faraday Future Intelligent Electric Inc., a Delaware corporation (the “Issuer”)
and the financial institutions or other entities from time to time party thereto (each as a “Purchaser” and collectively,
the “Purchasers”).
WHEREAS, the Issuer intends
to issue additional Notes in an aggregate principal amount of up to $40,000,000 (collectively, the “New Notes”), and
enter into certain other amendments to the terms of the Existing Securities Purchase Agreement applicable to the purchase of the New Notes
by the New Purchaser as set forth herein.
WHEREAS, the New Purchaser
desires to become a “Purchaser” under the Securities Purchase Agreement in connection with such New Notes.
WHEREAS, in accordance with
the provisions contained herein, the New Purchaser hereby agrees, or hereby agrees to cause FF Simplicity Ventures LLC or its permitted
assigns, to commit to exercise $20,000,000 Tranche B Notes (as defined in the Secured SPA) on the date hereof, with funding of 75% of
such amount within 5 Business Days of the date hereof and the remaining 25% of such amount within 3 Business Days of the first funding.
WHEREAS, each of the Closing Date Purchasers (as defined below) and certain of those Purchasers under the Secured SPA have executed and
delivered on the date hereof, a consent to the provisions of this Agreement.
NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which hereby are acknowledged by the parties hereto, the parties hereto hereby
agree as follows:
Section 1. Joinder.
Upon the occurrence of the Amendment Effective Date (as defined herein) (i) the New Purchaser acknowledges and agrees that it shall become
a Purchaser under the Securities Purchase Agreement of the New Notes and shall have all of the rights and obligations of a Purchaser
under the Securities Purchase Agreement and the other Financing Documents, including without limitation, all voting rights associated
with such New Notes, all rights to receive interest on such New Notes and all fees with respect to such New Notes and other rights of
a Purchaser under the Securities Purchase Agreement and the other Financing Documents with respect to such New Notes, in each case subject
to the satisfaction on each Funding Date (as defined herein) of the closing conditions applicable to the purchase of such New Notes set
forth in the Securities Purchase Agreement and (ii) parties hereto agree that the New Notes shall be “Notes” under the Securities
Purchase Agreement for all purposes thereunder and (iii) this Agreement shall be a “Transaction Document” under the Securities
Purchase Agreement.
1 | Unless otherwise defined herein, capitalized terms used herein
shall have the meanings ascribed to such terms in the Securities Purchase Agreement. |
Section 2. Representations,
Warranties and Agreements of the New Purchaser. The New Purchaser makes and confirms to the other Purchasers all of the representations,
warranties and covenants of a Purchaser under the Securities Purchase Agreement; provided, however, that the New Purchaser is making those
representations and warranties contained in Article 13 of the Securities Purchase Agreement solely with respect to itself (and
not with respect to any other Purchaser). Without limiting the foregoing, the New Purchaser (a) represents and warrants that (i)
it is legally authorized to, and has full power and authority to, enter into this Agreement and perform its obligations under this Agreement;
(ii) it is not (1) a natural person, (2) a Disqualified Purchaser or (3) the Issuer or an Affiliate of the Issuer and (iii) it meets all
the requirements to be an assignee under Section 12.6 of the Securities Purchase Agreement (subject to such consents, if any, as
may be required under Section 12.6 of the Securities Purchase Agreement); (b) confirms that it has received copies of such
documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Agreement; (c) agrees
that it has and will, independently and without reliance upon any other Purchaser and based upon such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in evaluating the New Notes, the other Financing Documents,
the creditworthiness of the Issuer and the value of the assets of the Issuer, and taking or not taking action under the Financing Documents;
(d) agrees that, by this Agreement, the New Purchaser has become a party to and will perform in accordance with their terms all the
obligations which by the terms of the Financing Documents are required to be performed by it as a Purchaser; and (e) prior to the date
hereof has delivered to the Issuer any documentation required to be delivered by it pursuant to the Securities Purchase Agreement (including
(x) in the event New Purchaser is a Foreign Purchaser, the receipt by Issuer of United States Internal Revenue Service Forms W-8ECI,
W-8BEN (W-8BEN-E, as applicable) or W-8IMY (as applicable), and if applicable a portfolio interest certificate and such other forms, certificates
or documents, including those prescribed by the United States Internal Revenue Service, properly completed and executed by the New Purchaser,
certifying as to New Purchaser’s entitlement to exemption from withholding or deduction of Taxes and (y) if New Purchaser is
not a Foreign Purchaser and not an exempt recipient within the meaning of Treasury Regulation Section 1.6049-4(c), a duly completed and
true and accurate Internal Revenue Service Form W-9), duly completed and executed by the New Purchaser.
Section 3. Representations,
Warranties and Agreements of the Issuer. Subject to the Note Waivers (including any cross-default under this Agreement or the Securities
Purchase Agreement, in each case, that may arise as a matter of any Default or Event of Default under the Secured SPA), the Issuer makes
and confirms to the New Purchaser as of the date hereof all of the representations, warranties and covenants of Issuer under the Securities
Purchase Agreement. Notwithstanding anything to the contrary in any of the Secured SPA or the Securities Purchase Agreement, the Purchasers
under the Securities Purchase Agreement (including the New Purchaser) and the Purchasers under the Secured SPA, party hereto, acknowledge
and agree that the Issuer does not have sufficient authorized or registered shares to serve as Underlying Shares for the Notes (as defined
in the Secured SPA), Notes (including the New Notes) or related Warrants (as defined in each of the Secured SPA and Securities Purchase
Agreement, respectively) and that the Issuer shall not be deemed in breach of any of the Secured SPA, or related Notes and Warrants, or
the Securities Purchase Agreement, or related Notes and Warrants, as a result thereof.
Section 4. Other Agreements,
Waivers and Amendments. Nothwithstanding any provision to the contrary contained in the Securities Purchase Agreement, the parties
hereto agree as follows, effective as of the Amendment Effective Date:
| (i) | Agreement to Fund New Notes. The New Purchaser hereby agrees to make fundings under the New Notes
in accordance with the terms of the New Notes that are executed and delivered to the New Purchaser by the Issuer on the date hereof, which
shall be substantially in the form of Exhibit C to the Securities Purchase Agreement, subject to any differences described below and the
Issuer complying in all material respects with any covenants set forth in this Agreement (including, without limitation, Section 4(k)
below), and such New Notes shall constitute Notes for all purposes of the Securities Purchase Agreement. |
| (ii) | Conversion Price. Section 3(b) of the New Notes shall provide for: “The conversion price
in effect on any Conversion Date shall be $0.8925 subject to adjustment as set forth herein (the “Conversion Price”).” |
| (iii) | Transfer Restriction. Section 3(f) of the New Notes shall be amended and restated as follows: “Notwithstanding
anything to the contrary in this Note, the shares of Common Stock underlying the principal amount of this Note funded at each such Closing
may be directly or indirectly transferred, sold or otherwise disposed of. For the avoidance of doubt, nothing in this Section 3(f) shall
restrict the ability of the Holder to pledge shares of Common Stock issued upon conversion of this Note.” |
| (iv) | Floor Price. The Floor Price in the New Notes shall be amended and restated to mean
$0.05 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions occurring
thereafter) (or such lower amount as may be permitted by the principal Trading Market
of the Common Stock from time to time). |
| (v) | Closing Conditions. The definition of Closing Conditions in the New Notes shall be amended and
restated to mean “receipt by the Issuer of (a) an effective Registration Statement with respect to the Underlying Shares for such
Closing under the Securities Purchase Agreement and (b) the Issuer shall have reserved the Required Reserve Amount (as defined in Section
4(k) of that certain Joinder and Amendment Agreement, by and among the Holder and the Issuer, dated June 26, 2023 (the “Joinder”))
of shares of Common Stock underlying the Applicable Notes (as defined in the Joinder, including any New Notes to be issued at such applicable
Closing) as required pursuant to Section 4(k) of the Joinder in full as of such Closing Date.” |
| (vi) | Beneficial Ownership Limitation. The definition of Beneficial Ownership Limitation contained in
paragraph 3(d) of the New Notes shall be amended and restated to mean “The “Beneficial Ownership Limitation” shall be
4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock
issuable upon conversion of this Note. The Holder, upon notice to the Issuer, may increase or decrease the Beneficial Ownership Limitation
provisions of this Section 3(d);, provided that the Beneficial Ownership Limitation in no event exceeds 4.99% 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 this Note
held by the Holder and the Beneficial Ownership Limitation provisions of this Section 3(d) shall continue to apply.” |
| (vii) | Notwithstanding anything to the contrary contained in this Agreement or the Securities Purchase Agreement,
the terms and conditions of the New Notes can not be amended, modified, supplemented or amended and restated without the consent of the
New Purchaser. |
| (b) | Funding Dates. In accordance with the introductory paragraph of the New Notes, the New Purchaser
hereby commits to fund to the Issuer the amount set forth below on each of the respective following dates (each, a “Funding Date”
and the commitments to fund under such New Notes, the “New Notes Commitments”): |
| (i) | $5 million in principal amount under the New Notes within five (5) Business Days after the satisfaction
of the Closing Conditions or such earlier Business Day as designated by the Holder by notice to the Issuer (the “First Closing”); |
| (ii) | $5 million in principal amount under the New Notes within fifteen (15) Business Days after the First Closing
(the “Second Closing”); |
| (iii) | $5 million in principal amount under the New Notes within fifteen (15) Business Days after the Second
Closing (the “Third Closing”); |
| (iv) | $5 million in principal amount under the New Notes within fifteen (15) Business Days after the satisfaction
of the Closing Conditions (the “Fourth Closing”); |
| (v) | $5 million in principal amount under the New Notes within fifteen (15) Business Days after the Fourth
Closing (the “Fifth Closing”); |
| (vi) | $5 million in principal amount under the New Notes within fifteen (15) Business Days after the Fifth Closing
(the “Sixth Closing”); |
| (vii) | $5 million in principal amount under the New Notes within fifteen (15) Business Days after the Sixth Closing
(the “Seventh Closing”); and |
| (viii) | $5 million in principal amount under the New Notes within fifteen (15) Business Days after the Seventh
Closing (the “Eighth Closing”). |
| (c) | Specific Amendments and Waivers. The Purchasers hereby agree to amend and/or amend and restate,
as applicable, the following provisions of the Existing Securities Purchase Agreement as follows: |
| (i) | Additional Defined Terms. |
“First Amendment”
means, that certain Amendment No. 1, dated as of June 26, 2023 by and among the Issuer and the Closing Date Purchasers.
“Joinder Amendment”
means, the Joinder and Amendment Agreement, entered into by the Issuer, the Purchasers (including the New Purchaser) on the Amendment
Effective Date.
“Amendment Effective Date”
has the meaning set forth in the Joinder Amendment.
“Closing Date Purchasers”
means Metaverse Horizon Limited, a British Virgin Islands company and V W Investment Holding Limited, a British Virgin Islands company.
“New Notes”
has the meaning set forth in the Joinder Amendment.
“New Notes Commitments”
has the meaning set forth in the Joinder Amendment.
“New Purchaser”
has the meaning set forth in the Joinder Amendment.
| (d) | Commitment Annex. The Commitment Annex to the Existing Securities Purchase
Agreement is amended and restated in its entirety in the manner set forth on Schedule 1 attached hereto. |
| (e) | Optional Purchase of Additional Notes. Section 2.1(d) of the Existing Securities Purchase Agreement is hereby amended and restated
in its entirety as follows: |
“(1) Each Closing
Date Purchaser has the option upon written notice to the Issuer to purchase from time to time for twelve (12) months from the Closing
Date and (2) the New Purchaser has the option upon written notice to the Issuer to purchase from time to time for twelve (12) months from
the Amendment Effective Date, in each case, additional convertible senior unsecured notes and warrants on the same terms as the Notes,
and if such option is exercised, the Issuer shall issue to such Purchaser additional convertible senior unsecured notes and warrants on
the same terms as the Notes in an amount not to exceed 50% (or with the prior written consent of the Issuer, the Issuer shall issue to
such Purchaser additional convertible senior unsecured notes and warrants on the same terms as the Notes in an amount not to exceed 100%)
of the initial principal amount of the Notes issued to such Purchaser pursuant to Section 2.1(a) and purchased for cash (each of the foregoing
clauses (1) and (2), collectively, the “Additional Notes”).”
| (f) | Conditions to Funding the New Notes. The obligation of the New Purchaser to fund amounts under
the New Notes on each Funding Date shall be subject solely to the satisfaction or waiver the Closing Conditions (as defined in the New
Note and amended hereby). |
| (g) | Additional Commitments Under the Securities Purchase Agreement. FF Simplicity Ventures LLC or a
permitted assign (“FFSV”) hereby agrees to exercise its option to purchase $20,000,000 of Tranche B Notes in accordance
with the terms of the Secured SPA subject to the funding timeline set forth in this Agreement and satisfaction of the Tranche B Closing
Conditions. If FFSV exercises its option to invest another $10,000,000 of Tranche B Notes in accordance with the terms of the Secured
SPA on or prior to the later of (x) August 1, 2023 and (y) four (4) Business Days after the shareholder meeting for the Shareholder Approval,
then the Issuer hereby agrees, in accordance with the provisions contained herein, to enter into a subsequent amendment to the Securities
Purchase Agreement whereby the New Purchaser will invest another $20,000,000 in New Notes subject to terms substantially identical to
those provided for in the Securities Purchase Agreement in effect on the date hereof and this Agreement (including, without limitation,
the funding date timeline). The Tranche B Closing Conditions shall mean the following: (i) deliver a Warrant registered in the name of
FFSV to FFSV to purchase up to a number of shares of Common Stock equal to 33% of FFSV’s Conversion Shares on the Closing Date with
an exercise price equal to $0.8925, (ii) deliver to FFSV the applicable Tranche B Note, (iii) subject to the Note Waivers, no Default
or Event of Default exists and (iv) subject to the Note Waivers, the representations and warranties in the Financing Documents are true
and correct in all material respects (without duplication of any materiality qualifier) both before and after giving effect to such Tranche
B Note. Notwithstanding anything to the contrary in any of the Secured SPA or the Securities Purchase Agreement, the Purchasers under
the Securities Purchase Agreement (including the New Purchaser) and the Purchasers under the Secured SPA, party hereto, acknowledge and
agree that the Issuer does not have sufficient authorized or registered shares to serve as Underlying Shares for the Notes (as defined
in the Secured SPA), Notes (including the New Notes) or related Warrants (as defined in each of the Secured SPA and Securities Purchase
Agreement, respectively) and that the Issuer shall not be deemed in breach of any of the Secured SPA, or related Notes and Warrants, or
the Securities Purchase Agreement, or related Notes and Warrants, as a result thereof. |
| (h) | Amendment to Warrant. Beneficial Ownership Limitation. The definition of Beneficial Ownership Limitation
contained in paragraph 2(e) of the Warrants issued to New Purchaser in connection with the issuance of the New Notes shall be amended and restated
to mean “The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding
immediately after giving effect to the issuance of shares of Common Stock issuable upon the 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 4.99% 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.” |
| (i) | Amendments to Secured SPA; Exchanges. In accordance with the provisions of the Secured SPA and
Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”), the New Purchaser hereby agrees on
behalf of its Affiliates, that after the date hereof, FFSV may deliver written notice (each, an “Exchange Notice”,
and the date of such applicable Exchange Notice, each, an “Exchange Date”) to exchange (each, an “Exchange”)
any Tranche B Notes, in whole or in part (each, an “Exchanging Note”, and such outstanding amounts thereunder, each,
an “Exchanging Amount”), for either (x) Tranche D Notes (as defined in the Secured SPA), and/or (y) any Additional
Note under the Securities Purchase Agreement, as applicable (as set forth in such applicable Exchange Notice, each a “New Exchange
Note”, and as converted, each a “New Exchange Conversion Share”) as follows: |
| (i) | General. Each Exchange shall automatically be deemed to be consummated on the corresponding Exchange
Date, without any further action by any Person, and, upon the delivery by FFSV to the Issuer of such Exchange Notice, FFSV shall automatically
be deemed to have exchanged the applicable Exchanging Amount of the applicable Exchanging Note for a New Exchange Note with an aggregate
amount outstanding equal to the Exchanging Amount. The Issuer shall deliver a convertible note certificate evidencing such New Exchange
Note to FFSV (or its designee) by no later than the fourth (4th) Trading Day after the Exchange Date (or such other date as
FFSV and the issuer shall mutually agree). For the avoidance of doubt, FFSV shall automatically be deemed to be the holder of the applicable
New Exchange Note upon such applicable Exchange Date, with full power to convert, redeem or otherwise enforce the terms and conditions
of the New Exchange Note on or after such Exchange Date, whether or not the Issuer shall have delivered the convertible note certificate
evidencing such New Exchange Note to FFSV (or its designee) on or prior to such date of determination. |
| (ii) | Effect of Exchange on Secured SPA or Securities Purchase Agreement. The consummation of an Exchange
shall reduce FFSV’s optionality for Tranche D Notes and/or Additional Notes, as applicable, under the Secured SPA or Securities
Purchase Agreement, respectively, as applicable, for such corresponding Exchanging Amount and restore such optionality for the Tranche
B Notes in accordance with the terms of the Secured SPA in effect as of the date hereof. |
| (iii) | The Issuer acknowledges and agrees that (assuming FFSV is not then an affiliate of the Issuer) (i) the
holding period of the New Exchange Notes (and upon conversion of the New Exchange Notes, the New Exchange Conversion Shares) shall commence
at the original issuance of such corresponding Exchanging Note and shall not be re-set in connection with such applicable Exchange and
(ii) the Issuer is not aware of any other event reasonably likely to occur that would reasonably be expected to result in the New Exchange
Conversion Shares becoming ineligible to be resold by FFSV without restriction under applicable law, rules and regulations at such time
as Rule 144 would otherwise had been initially available by FFSV to be used for the resale of the Exchanging Note. For the avoidance of
doubt, and for purposes of Rule 144, the Issuer acknowledges and agrees that the holding period of the New Exchange Notes (and upon conversion
of the New Exchange Notes, the New Exchange Conversion Shares) may be tacked onto the holding period of the Exchanging Notes, and the
Issuer agrees not to take a position contrary to this Section 4(i)(iii). |
| (iv) | Additional Representations Solely with Respect to each Exchange. As of each Exchange Date, the
Issuer shall be deemed to have represented and warranted to FFSV as follows: |
| i. | No Commission; No Other Consideration. No brokerage or finder’s fees or commissions are or
will be payable by the Issuer or any Subsidiaries to any broker, financial advisor or consultant, finder, placement agent investment banker,
bank or other Person in connection with the Exchange. The Issuer has not paid or given, and has not agreed to pay or give, directly or
indirectly, any commission or other remuneration for soliciting (or otherwise in connection with) the Exchange (including, without limitation,
to the Placement Agent). The applicable Exchange Amount of the Exchanging Note is the sole consideration being conveyed to the Issuer
for the issuance of the applicable New Exchange Note (and upon conversion of such New Exchange Note, the New Exchange Conversion Shares)
and no other consideration has or will be paid for such New Exchange Note. |
| ii. | 3(a)(9) Representation. The Issuer has not, nor has any person acting on its behalf, directly or
indirectly made any offers or sales of any security or solicited any offers to buy any security under circumstances that would cause the
Exchange and the issuance of the applicable New Exchange Note (and upon conversion of such New Exchange Notes, the New Exchange Conversion
Shares) pursuant to such Exchange to be integrated with prior offerings by the Issuer for purposes of the Securities Act, which would
prevent the Issuer from delivering such applicable New Exchange Note (and upon conversion of such New Exchange Note, the New Exchange
Conversion Shares) to the Holder pursuant to Section 3(a)(9) of the Securities Act, nor will the Issuer take any action or steps that
would cause the applicable Exchange, issuance and delivery of such New Exchange Note (and upon conversion of such New Exchange Note, the
New Exchange Conversion Shares) to be integrated with other offerings to the effect that the delivery of such New Exchange Note (and upon
conversion of such New Exchange Note, the New Exchange Conversion Shares) to FFSV would be seen not to be exempt pursuant to Section 3(a)(9)
of the 1933 Act. |
| iii. | No Third-Party Advisors. Other than legal counsel, the Issuer has not (and will not have) engaged
any third parties to assist in the solicitation with respect to the Exchange. |
| (j) | Amendments to certain Notes issued under the Secured SPA. |
| (i) | The Floor Price in each of the Notes issued to FFSV or one of its Affiliates under the Secured SPA shall
be amended and restated as $0.05 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or
other similar transactions occurring thereafter) (or such lower amount as may be permitted by the principal Trading Market of the Common Stock from time to time). |
| (k) | Reservation of Shares. Notwithstanding anything in any agreement of the Issuer to the contrary,
at any time any Tranche A Notes, Tranche B Notes, Tranche C Notes or Tranche D Notes remain outstanding (and any New Notes, Additional
Notes and/or New Exchange Notes then outstanding or then issuable in connection with a transaction in which such determination is being
made) (collectively, the “Applicable Notes”), the Issuer shall use reasonable best efforts to at all times have authorized,
and reserved for the purpose of issuance, no less than 100% of the maximum number of shares of Common Stock issuable upon conversion of
all the Applicable Notes then outstanding and any New Notes, Additional Notes and/or New Exchange Notes then issuable in connection with
a transaction in which such determination is being made (assuming for purposes hereof that any conversion of any Applicable Note shall
not take into account any limitations on the conversion of such Applicable Note set forth in such Applicable Note), (collectively, the
“Required Reserve Amount”); provided that at no time shall the number of shares of Common Stock reserved pursuant to
this Section 4(k) be reduced other than proportionally in connection with any conversion, exchange and/or redemption, as applicable of
such Applicable Note. If at any time the number of shares of Common Stock authorized and reserved for issuance is not sufficient to meet
the Required Reserve Amount, the Issuer will use reasonable best efforts to promptly take all corporate action necessary to authorize
and reserve a sufficient number of shares, including, without limitation, calling a special meeting of stockholders to authorize additional
shares to meet the Issuer’s obligations pursuant to this Agreement, in the case of an insufficient number of authorized shares,
obtain stockholder approval of an increase in such authorized number of shares, and voting the management shares of the Issuer in favor
of an increase in the authorized shares of the Issuer to ensure that the number of authorized shares is sufficient to meet the Required
Reserve Amount. |
Section 5. Address and
Payment Instructions. The New Purchaser specifies as its address for notices and its lending office for all Notes the offices set
forth below:
Notice Address:
FF Vitality Ventures
LLC
17 State Street, Suite
2100
New York, NY 10004
Attention: Antonio Ruiz-Gimenez
Telephone: (917) 692-3976
Email: operations@atwpartners.com
All payments to the New Purchaser
under the Securities Purchase Agreement shall be made as provided in the Securities Purchase Agreement in accordance with separate instructions
delivered to the New Purchaser.
Section 6. Fees and Expenses.
| (a) | Upon the occurrence of the Amendment Effective Date, the Issuer hereby agrees to pay the New Purchaser
a one-time $300,000 working fee for the reimbursement of costs and expenses in connection with diligence and transactions contemplated
hereby, which fee shall be paid by allowing the New Purchaser to net fund any New Notes issued on the Amendment Effective Date. |
| (b) | The Issuer hereby agrees to reimburse the New Purchaser for reasonable and documented out-of-pocket legal
expenses incurred in connection with this Agreement, the Secured SPA and the transaction related thereto in an amount not to exceed $350,000
which shall be paid by allowing the New Purchaser to net fund any New Notes issued on the Amendment Effective Date. |
Section 7. Effectiveness
of Agreement. This Agreement shall be effective on the date (the “Amendment Effective Date”) that each of the following
conditions are satisfied or waived by the New Purchaser:
| (a) | this Agreement shall have been executed by the Issuer, New Purchaser, and each of the Closing Date Purchasers; |
| (b) | the Issuer has delivered to the New Purchaser fully executed copies of all New Notes in an aggregate principal
amount of the New Purchaser’s New Note Commitments; |
| (c) | subject to the Note Waivers (including any cross-default under this Agreement or the Securities Purchase
Agreement, in each case, that may arise as a matter of any Default or Event of Default under the Secured SPA), no Default or Event of
Default exists; and |
| (d) | subject to the Note Waivers (including any cross-default under this Agreement or the Securities Purchase
Agreement, in each case, that may arise as a matter of any Default or Event of Default under the Secured SPA), the representations and
warranties contained in the Financing Documents are true and correct in all material respects (without duplication of any materiality
qualifier) as of such date. |
Section 8. Additional Agreements
of Issuer. The Issuer hereby agrees that the New Purchaser shall be a Purchaser under the Securities Purchase Agreement and shall
be issued Notes as set forth herein. The Issuer agrees that the New Purchaser shall have all of the rights and remedies of a Purchaser
under the Securities Purchase Agreement and the other Financing Documents as if the New Purchaser were an original Purchaser under and
signatory to the Securities Purchase Agreement. Further, for so long as the New Purchaser remains a Purchaser under the Securities Purchase
Agreement, it shall be entitled to the indemnification provisions from the Issuer in favor of the Purchasers as provided in the Securities
Purchase Agreement and the other Financing Documents.
Section 9. Governing
Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 10. Counterparts.
This Agreement may be executed in any number of counterparts each of which, when taken together, shall constitute one and the same agreement.
Delivery of an executed signature page of this Agreement by facsimile transmission or by electronic mail as a “.pdf” or “.tif”
attachment shall be effective as delivery of a manually executed counterpart hereof.
Section 11. Headings.
Section headings have been inserted herein for convenience only and shall not be construed to be a part hereof.
Section 12. Amendments;
Waivers. This Agreement may not be amended, changed, waived or modified except by a writing executed by the New Purchaser and
the Issuer, except that the New Purchaser may elect to unilaterally
waive, in its sole discretion, any of the conditions set forth herein or otherwise waive or modify terms hereof in accordance
Section 12.5 of the Securities Purchase Agreement. Any waiver of any provision of this Agreement or any other Financing Document
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 New
Purchaser in the exercise of any right, power or remedy shall operate as a waiver thereof, nor shall any single or partial exercise
by any of them of any right, power or remedy preclude other or further exercise thereof, or the exercise of any other right, power
or remedy.
Section 13. Binding
Effect. This Agreement shall be binding upon the New Purchaser, and its successors and permitted assigns and shall inure to the benefit
of the Issuer, and the Purchasers, and their respective successors and permitted assigns. For the avoidance of doubt, New Purchaser shall
be permitted to assign its rights and obligations hereunder to any party in accordance with the terms of the Securities Purchase Agreement.
Section 14. Definitions.
Terms not otherwise defined herein are used herein with the respective meanings given them in the Securities Purchase Agreement.
Section 15. Entire
Agreement. This Agreement embodies the entire agreement of the parties with respect to the subject matter hereof and supersedes all
other prior arrangements and understandings relating to the subject matter hereof. In the event of a conflict between this Agreement and
the Securities Purchase Agreement, this Agreement shall control.
Section 16. Consent.
Each of the Closing Date Purchasers hereby consent to all of the terms provided in this Agreement, in all respects, for all purposes under
the Securities Purchase Agreement.
Section 17. Adjustments
to Conversion and Exercise Prices. For the avoidance of doubt, nothing contained herein, or in the specific amendments with respect
to the Secured SPA, the Notes under the Securities Purchase Agreement or the Notes under the Secured SPA, as applicable, shall trigger
any adjustment to the conversion or exercise price under the Notes or Warrants under the Secured SPA and Securities Purchase Agreement.
Furthermore, each of Senyun International Ltd., FFSV and FF Prosperity Ventures LLC, hereby waive any such rights to any adjustment to
the conversion or exercise price in each of the Secured SPA and/or the Securities Purchase Agreement, as applicable, and the related Notes
and Warrant.
Section 18. Disclosure
of Transaction. The Issuer shall, on or before 8:30 a.m., New York City time, on the date immediately following the date of this Agreement,
file a Current Report on Form 8-K describing the terms of the transactions contemplated hereby in the form required by the 1934 Act and
attaching this Agreement, to the extent they are required to be filed under the 1934 Act, that have not previously been filed with the
Securities and Exchange Commission by the Issuer (including, without limitation, this Agreement) as exhibits to such filing (including
all attachments, the “8-K Filing”). From and after the filing of the 8-K Filing, the Issuer shall have disclosed all
material, non-public information (if any) provided up to such time to the Purchasers under the Securities Purchase Agreement and Secured
SPA by the Issuer or any of its Subsidiaries or any of their respective officers, directors, employees or agents. In addition, effective
upon the filing of the 8-K Filing, the Issuer acknowledges and agrees that any and all confidentiality or similar obligations under any
agreement with respect to the transactions contemplated by this Agreement or as otherwise disclosed in the 8-K Filing, whether written
or oral, between the Issuer, any of its Subsidiaries or any of their respective officers, directors, affiliates, employees or agents,
on the one hand, and any of the Purchasers under the Securities Purchase Agreement and Secured SPA or any of their affiliates, on the
other hand, shall terminate. Neither the Issuer, its Subsidiaries nor the Purchasers under the Securities Purchase Agreement and Secured
SPA shall issue any press releases or any other public statements with respect to the transactions contemplated hereby; provided,
however, the Issuer shall be entitled, without the prior approval of the Purchasers under the Securities Purchase Agreement
and Secured SPA, to make a press release or other public disclosure with respect to such transactions (i) in substantial conformity with
the 8-K Filing and contemporaneously therewith or (ii) as is required by applicable law and regulations or requested by a governmental
authority or self-regulatory organization (provided that in the case of clause (i) the Purchasers under the Securities Purchase Agreement
and Secured SPA shall be consulted by the Issuer in connection with any such press release or other public disclosure prior to its release).
Without the prior written consent of the Purchasers under the Securities Purchase Agreement and Secured SPA (which may be granted or withheld
in the Purchasers’ under the Securities Purchase Agreement and Secured SPA sole discretion), except as required by applicable law
or requested by a governmental authority or self-regulatory organization, the Issuer shall not (and shall cause each of its Subsidiaries
and affiliates to not) disclose the name of any Purchaser under the Securities Purchase Agreement or Secured SPA in any filing, announcement,
release or otherwise.
[Signatures on following page]
IN WITNESS WHEREOF, the undersigned
has duly executed this Agreement as of the date and year first written above.
|
FF VITALITY VENTURES LLC |
|
|
|
|
|
By: |
/s/ Antonio Ruiz-Gimenez |
|
|
Name: |
Antonio Ruiz-Gimenez |
|
|
Title: |
Managing Partner |
[Signature Page to Joinder and Amendment Agreement]
Accepted and Agreed as of the
date first written above.
FARADAY FUTURE INTELLIGENT ELECTRIC INC.,
as Issuer |
|
|
|
By: |
/s/ Xuefeng Chen |
|
Name: |
Xuefeng Chen |
|
Title: |
Chief Executive Officer |
|
[Signature Page to Joinder and Amendment Agreement]
SCHEDULE 1
Amended and Restated Commitment Annex
Purchaser | |
Commitment Amount | |
Metaverse Horizon Limited | |
$ | 80,000,000 | |
V W Investment Holding Limited | |
$ | 20,000,000 | |
FF Vitality Ventures LLC | |
$ | 40,000,000 | |
TOTAL | |
$ | 140,000,000 | |
[Signature Page to Joinder and Amendment
Agreement]
Exhibit 10.3
Execution Version
SECOND
JOINDER AND AMENDMENT AGREEMENT
THIS
SECOND JOINDER AND AMENDMENT AGREEMENT (this “Agreement”) dated as
of June 26, 2023, is executed by and among Senyun International Ltd. (the “Additional Purchaser”) or
“Senyun”) and the Issuer.1
WHEREAS, reference is made
to the Securities Purchase Agreement, dated as of May 8, 2023 (as amended by that certain Amendment No. 1, dated as of June 26, 2023 and
that certain Joinder and Amendment Agreement, dated as of June 26, 2023, the “Existing Securities Purchase Agreement”;
the Existing Securities Purchase Agreement, as further amended, restated, amended and restated, supplemented or otherwise modified from
time to time, including pursuant to this Agreement, the “Securities Purchase Agreement”) by and among Faraday Future
Intelligent Electric Inc., a Delaware corporation (the “Issuer”) and the financial institutions or other entities from
time to time party thereto (each as a “Purchaser” and collectively, the “Purchasers”).
WHEREAS, the Issuer intends
to issue additional Notes in an aggregate principal amount of up to $30,000,000 (collectively, the “New Senyun Notes”),
and enter into certain other amendments to the terms of the Existing Securities Purchase Agreement applicable to the purchase of the New
Senyun Notes by the Additional Purchaser as set forth herein.
WHEREAS, the Additional Purchaser
desires to become a “Purchaser” under the Securities Purchase Agreement in connection with such New Senyun Notes.
WHEREAS,
in accordance with the provisions contained herein, the Additional Purchaser hereby agrees to commit to exercise $15,000,000 Tranche
A Notes (as defined in the Secured SPA) on the date hereof, with funding of 75% of such amount within 5 Business Days of the date
hereof and the remaining 25% of such amount within 3 Business Days of the first funding.
WHEREAS, each of the Closing Date Purchasers and
certain of those Purchasers under the Secured SPA have executed and delivered on the date hereof, a consent to the provisions of this
Agreement.
NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which hereby are acknowledged by the parties hereto, the parties hereto hereby
agree as follows:
Section 1. Joinder.
Upon the occurrence of the Third Amendment Effective Date (as defined herein) (i) the Additional Purchaser acknowledges and agrees that
it shall become a Purchaser under the Securities Purchase Agreement of the New Senyun Notes and shall have all of the rights and obligations
of a Purchaser under the Securities Purchase Agreement and the other Financing Documents, including without limitation, all voting rights
associated with such New Senyun Notes, all rights to receive interest on such New Senyun Notes and all fees with respect to such New Senyun
Notes and other rights of a Purchaser under the Securities Purchase Agreement and the other Financing Documents with respect to such New
Senyun Notes, in each case subject to the satisfaction on each Funding Date (as defined herein) of the closing conditions applicable to
the purchase of such New Senyun Notes set forth in the Securities Purchase Agreement and (ii) parties hereto agree that the New Senyun
Notes shall be “Notes” under the Securities Purchase Agreement for all purposes thereunder and (iii) this Agreement shall
be a “Transaction Document” under the Securities Purchase Agreement.
1 | Unless otherwise defined herein, capitalized terms used herein
shall have the meanings ascribed to such terms in the Securities Purchase Agreement. |
Section 2. Representations,
Warranties and Agreements of the Additional Purchaser. The Additional Purchaser makes and confirms to the other Purchasers all of
the representations, warranties and covenants of a Purchaser under the Securities Purchase Agreement; provided, however, that the Additional
Purchaser is making those representations and warranties contained in Article 13 of the Securities Purchase Agreement solely with
respect to itself (and not with respect to any other Purchaser). Without limiting the foregoing, the Additional Purchaser (a) represents
and warrants that (i) it is legally authorized to, and has full power and authority to, enter into this Agreement and perform its obligations
under this Agreement; (ii) it is not (1) a natural person, (2) a Disqualified Purchaser or (3) the Issuer or an Affiliate of the Issuer
and (iii) it meets all the requirements to be an assignee under Section 12.6 of the Securities Purchase Agreement (subject to such
consents, if any, as may be required under Section 12.6 of the Securities Purchase Agreement); (b) confirms that it has received
copies of such documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this
Agreement; (c) agrees that it has and will, independently and without reliance upon any other Purchaser and based upon such documents
and information as it shall deem appropriate at the time, continue to make its own credit decisions in evaluating the New Senyun Notes,
the other Financing Documents, the creditworthiness of the Issuer and the value of the assets of the Issuer, and taking or not taking
action under the Financing Documents; (d) agrees that, by this Agreement, the Additional Purchaser has become a party to and will
perform in accordance with their terms all the obligations which by the terms of the Financing Documents are required to be performed
by it as a Purchaser; and (e) prior to the date hereof has delivered to the Issuer any documentation required to be delivered by it pursuant
to the Securities Purchase Agreement (including (x) in the event Additional Purchaser is a Foreign Purchaser, the receipt by Issuer
of United States Internal Revenue Service Forms W-8ECI, W-8BEN (W-8BEN-E, as applicable) or W-8IMY (as applicable), and if applicable
a portfolio interest certificate and such other forms, certificates or documents, including those prescribed by the United States Internal
Revenue Service, properly completed and executed by the Additional Purchaser, certifying as to Additional Purchaser’s entitlement
to exemption from withholding or deduction of Taxes and (y) if Additional Purchaser is not a Foreign Purchaser and not an exempt
recipient within the meaning of Treasury Regulation Section 1.6049-4(c), a duly completed and true and accurate Internal Revenue Service
Form W-9), duly completed and executed by the Additional Purchaser. The Issuer hereby acknowledges that, as of the date hereof, the Issuer
is in receipt of all documentation described in the foregoing clause (e).
Section 3. Representations,
Warranties and Agreements of the Issuer. Subject to the Note Waivers (including any cross-default under this Agreement or the
Securities Purchase Agreement, in each case, that may arise as a matter of any Default or Event of Default under the Secured SPA)
provided that, Senyun hereby retains any right to preserve and/or pursue any potential dispute with regards to a conversion notice
that Senyun delivered to the Issuer in May 2023), the Issuer makes and confirms to the Additional Purchaser as of the date hereof all of the
representations, warranties and covenants of Issuer under the Securities Purchase Agreement. Notwithstanding anything to the
contrary in any of the Secured SPA or the Securities Purchase Agreement, the Purchasers under the Securities Purchase Agreement
(including the Additional Purchaser) and the Purchasers under the Secured SPA, party hereto, acknowledge and agree that the Issuer
does not have sufficient authorized or registered shares to serve as Underlying Shares for the Notes (as defined in the Secured
SPA), Notes (including the New Senyun Notes) or related Warrants (as defined in each of the Secured SPA and Securities Purchase
Agreement, respectively) and that the Issuer shall not be deemed in breach of any of the Secured SPA, or related Notes and Warrants,
or the Securities Purchase Agreement, or related Notes and Warrants, as a result thereof; provided, however, that Senyun hereby retains any right to preserve
any potential dispute with regards to a conversion request that Senyun delivered to the Issuer in May 2023.
Section 4. Other Agreements,
Waivers and Amendments. Nothwithstanding any provision to the contrary contained in the Securities Purchase Agreement, the parties
hereto agree as follows, effective as of the Third Amendment Effective Date:
| (i) | Agreement to Fund New Senyun Notes. The Additional Purchaser hereby agrees to make fundings under
the New Senyun Notes in accordance with the terms of the New Senyun Notes that are executed and delivered to the Additional Purchaser
by the Issuer on the date hereof, which shall be substantially in the form of Exhibit C to the Securities Purchase Agreement, subject
to any differences described below and the Issuer complying in all material respects with any covenants set forth in this Agreement (including,
without limitation, Section 4(k) below), and such New Senyun Notes shall constitute Notes for all purposes of the Securities Purchase
Agreement. |
| (ii) | Conversion Price. Section 3(b) of the New Senyun Notes shall provide for: “The conversion
price in effect on any Conversion Date shall be $0.8925 subject to adjustment as set forth herein (the “Conversion Price”).” |
| (iii) | Transfer Restriction. Section 3(f) of the New Senyun Notes shall be amended and restated as follows:
“Notwithstanding anything to the contrary in this Note, the shares of Common Stock underlying the principal amount of this Note
funded at each such Closing may be directly or indirectly transferred, sold or otherwise disposed of. For the avoidance of doubt, nothing
in this Section 3(f) shall restrict the ability of the Holder to pledge shares of Common Stock issued upon conversion of this Note.” |
| (iv) | Floor Price. The Floor Price in the New Senyun Notes shall be amended and restated to mean 20%
of the Minimum Price (as defined in IM-5635-1 of the Nasdaq Stock Market) as of the Trading Day ended immediately prior to the time of
signing of this Agreement (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions
occurring thereafter). |
| (v) | Closing Conditions. The definition
of Closing Conditions in the New Senyun Notes shall be amended and restated to mean “receipt by the Issuer of (a) an effective
Registration Statement with respect to the Underlying Shares for such Closing under the Securities Purchase Agreement and (b) the Issuer
shall have reserved the Required Reserve Amount (as defined in Section 4(k) of this Agreement) of shares of Common Stock underlying the
Applicable Notes (as defined in this Agreement, including any New Senyun Notes to be issued at such applicable Closing) as required pursuant
to Section 4(k) of this Agreement in full as of such Closing Date. |
| (vi) | Notwithstanding anything to the contrary contained in this Agreement or the Securities Purchase Agreement,
the terms and conditions of the New Senyun Notes cannot be amended, modified, supplemented or amended and restated without the consent
of the Additional Purchaser. |
| (b) | Funding Dates. In accordance with the introductory paragraph of the New Senyun Notes, the Additional
Purchaser hereby commits to fund to the Issuer the amount set forth below on each of the respective following dates (each, a “Funding
Date” and the commitments to fund under such New Senyun Notes, the “New Senyun Notes Commitments”): |
| (i) | $3.75 million in principal amount under the New Senyun Notes within five (5) Business Days after the satisfaction
of the Closing Conditions or such earlier Business Day as designated by the Holder by notice to the Issuer (the “First Closing”); |
| (ii) | $3.75 million in principal amount under the New Senyun Notes within fifteen (15) Business Days after the
First Closing (the “Second Closing”); |
| (iii) | $3.75 million in principal amount under the New Senyun Notes within fifteen (15) Business Days after the
Second Closing (the “Third Closing”); |
| (iv) | $3.75 million in principal amount under the New Senyun Notes within fifteen (15) Business Days after the
satisfaction of the Closing Conditions (the “Fourth Closing”); |
| (v) | $3.75 million in principal amount under the New Senyun Notes within fifteen (15) Business Days after the
Fourth Closing (the “Fifth Closing”); |
| (vi) | $3.75 million in principal amount under the New Senyun Notes within fifteen (15) Business Days after the
Fifth Closing (the “Sixth Closing”); |
| (vii) | $3.75 million in principal amount under
the New Senyun Notes within fifteen (15) Business Days after the Sixth Closing (the “Seventh
Closing”); and |
| (viii) | $3.75 million in principal amount under the New Senyun Notes within fifteen (15) Business Days after
the Seventh Closing (the “Eighth Closing”). |
| (c) | Specific Amendments and Waivers. The Purchasers hereby agree to amend and/or amend and restate,
as applicable, the following provisions of the Existing Securities Purchase Agreement as follows: |
| (i) | Additional Defined Terms. |
“Additional Purchaser”
has the meaning set forth in the Third Amendment.
“Third Amendment Effective
Date” has the meaning set forth in the Third Amendment.
“Third Amendment”
means, the Second Joinder and Amendment Agreement, entered into by the Issuer, the Purchasers (including the Additional Purchaser) on
the Third Amendment Effective Date.
“New Senyun Notes”
has the meaning set forth in the Third Amendment.
“New Senyun Notes Commitments”
has the meaning set forth in the Third Amendment.
| (d) | Commitment Annex. The Commitment Annex to the Existing Securities Purchase
Agreement is amended and restated in its entirety in the manner set forth on Schedule 1 attached hereto. |
| (e) | Optional Purchase of Additional Notes. Section 2.1(d) of the Existing Securities Purchase Agreement is hereby amended and restated
in its entirety as follows: |
“(1) Each Closing
Date Purchaser has the option upon written notice to the Issuer to purchase from time to time for twelve (12) months from the Closing
Date, (2) the New Purchaser has the option upon written notice to the Issuer to purchase from time to time for twelve (12) months from
the Amendment Effective Date and (3) the Additional Purchaser has the option upon written notice to the Issuer to purchase from time to
time for twelve (12) months from the Third Amendment Effective Date, in each case, additional convertible senior unsecured notes and warrants
on the same terms as the Notes, and if such option is exercised, the Issuer shall issue to such Purchaser additional convertible senior
unsecured notes and warrants on the same terms as the Notes in an amount not to exceed 50% (or with the prior written consent of the Issuer,
the Issuer shall issue to such Purchaser additional convertible senior unsecured notes and warrants on the same terms as the Notes in
an amount not to exceed 100%) of the initial principal amount of the Notes issued to such Purchaser pursuant to Section 2.1(a) and purchased
for cash (each of the foregoing clauses (1) and (2), collectively, the “Additional Notes”).”
| (f) | Conditions to Funding the New Senyun Notes. The obligation of the Additional Purchaser to fund
amounts under the New Senyun Notes on each Funding Date shall be subject solely to the satisfaction or waiver the Closing Conditions (as
defined in the New Note and amended hereby). |
| (g) | Additional Commitments Under the Securities Purchase Agreement. Senyun hereby agrees to
exercise its option to purchase $15,000,000 of Tranche A Notes in accordance with the terms of the Secured SPA subject to the
funding timeline set forth in this Agreement and satisfaction of the Tranche A Closing Conditions. If Senyun exercises its option to
invest another $10,000,000 of Tranche A and/or B Notes in accordance with the terms of the Secured SPA on or prior to the later of
(x) August 1, 2023 and (y) four (4) Business Days after the shareholder meeting for the Shareholder Approval, then the Issuer hereby
agrees, in accordance with the provisions contained herein, to enter into a subsequent amendment to the Securities Purchase
Agreement whereby the Additional Purchaser will invest another $20,000,000 in New Senyun Notes subject to terms substantially
identical to those provided for in the Securities Purchase Agreement in effect on the date hereof and this Agreement (including,
without limitation, the funding date timeline). The Tranche A Closing Conditions shall mean the following: (i) deliver a Warrant
registered in the name of Senyun to Senyun to purchase up to a number of shares of Common Stock equal to 33% of Senyun’s
Conversion Shares on the Closing Date with an exercise price equal to $0.8925, (ii) deliver to Senyun the applicable Tranche A Note,
(iii) subject to the Note Waivers (for the avoidance of doubt, Senyun hereby retains any right to preserve and/or pursue any
potential dispute with regards to a conversion notice that Senyun delivered to the Issuer in May 2023), no Default or Event of Default
exists and (iv) subject to the Note Waivers (for the avoidance of doubt, Senyun hereby retains any right to preserve any potential
dispute with regards to a conversion notice that Senyun delivered to the Issuer in May 2023), the representations and warranties in the
Financing Documents are true and correct in all material respects (without duplication of any materiality qualifier) both before and
after giving effect to such Tranche A Note. Notwithstanding anything to the contrary in any of the Secured SPA or the Securities
Purchase Agreement, the Purchasers under the Securities Purchase Agreement (including the Additional Purchaser) and the Purchasers
under the Secured SPA, party hereto, acknowledge and agree that the Issuer does not have sufficient authorized or registered shares
to serve as Underlying Shares for the Notes (as defined in the Secured SPA), Notes (including the New Senyun Notes) or related
Warrants (as defined in each of the Secured SPA and Securities Purchase Agreement, respectively) and that the Issuer shall not be
deemed in breach of any of the Secured SPA, or related Notes and Warrants, or the Securities Purchase Agreement, or related Notes
and Warrants, as a result thereof. |
| (h) | Amendment to Warrant. Beneficial Ownership Limitation. The definition of Beneficial Ownership Limitation
contained in paragraph 2(e) of the Warrants issued to Senyun in connection with the issuance of the New Senyun Notes shall be amended
and restated to mean “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 the 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.” |
| (i) | Amendments to Secured SPA; Exchanges. In accordance with the provisions of the Secured SPA and
Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”), the Additional Purchaser hereby agrees
on behalf of its Affiliates, that after the date hereof, Senyun may deliver written notice (each, an “Exchange Notice”,
and the date of such applicable Exchange Notice, each, an “Exchange Date”) to exchange (each, an “Exchange”)
any Tranche B Notes, in whole or in part (each, an “Exchanging Note”, and such outstanding amounts thereunder, each,
an “Exchanging Amount”), for either (x) Tranche D Notes (as defined in the Secured SPA), and/or (y) any Additional
Note under the Securities Purchase Agreement, as applicable (as set forth in such applicable Exchange Notice, each a “New Exchange
Note”, and as converted, each a “New Exchange Conversion Share”) as follows: |
| (i) | General. Each Exchange shall automatically be deemed to be consummated on the corresponding Exchange
Date, without any further action by any Person, and, upon the delivery by Senyun to the Issuer of such Exchange Notice, Senyun shall automatically
be deemed to have exchanged the applicable Exchanging Amount of the applicable Exchanging Note for a New Exchange Note with an aggregate
amount outstanding equal to the Exchanging Amount. The Issuer shall deliver a convertible note certificate evidencing such New Exchange
Note to Senyun (or its designee) by no later than the fourth (4th) Trading Day after the Exchange Date (or such other date
as Senyun and the issuer shall mutually agree). For the avoidance of doubt, Senyun shall automatically be deemed to be the holder of the
applicable New Exchange Note upon such applicable Exchange Date, with full power to convert, redeem or otherwise enforce the terms and
conditions of the New Exchange Note on or after such Exchange Date, whether or not the Issuer shall have delivered the convertible note
certificate evidencing such New Exchange Note to Senyun (or its designee) on or prior to such date of determination. |
| (ii) | Effect of Exchange on Secured SPA or Securities Purchase Agreement. The consummation of an Exchange
shall reduce Senyun’s optionality for Tranche D Notes and/or Additional Notes, as applicable, under the Secured SPA or Securities
Purchase Agreement, respectively, as applicable, for such corresponding Exchanging Amount and restore such optionality for the Tranche
B Notes in accordance with the terms of the Secured SPA in effect as of the date hereof. |
| (iii) | The Issuer acknowledges and agrees that (assuming Senyun is not then an affiliate of the Issuer) (i) the
holding period of the New Exchange Notes (and upon conversion of the New Exchange Notes, the New Exchange Conversion Shares) shall commence
at the original issuance of such corresponding Exchanging Note and shall not be re-set in connection with such applicable Exchange and
(ii) the Issuer is not aware of any other event reasonably likely to occur that would reasonably be expected to result in the New Exchange
Conversion Shares becoming ineligible to be resold by Senyun without restriction under applicable law, rules and regulations at such time
as Rule 144 would otherwise had been initially available by Senyun to be used for the resale of the Exchanging Note. For the avoidance
of doubt, and for purposes of Rule 144, the Issuer acknowledges and agrees that the holding period of the New Exchange Notes (and upon
conversion of the New Exchange Notes, the New Exchange Conversion Shares) may be tacked onto the holding period of the Exchanging Notes,
and the Issuer agrees not to take a position contrary to this Section 4(i)(iii). |
| (iv) | Additional Representations Solely with Respect to each Exchange. As of each Exchange Date, the
Issuer shall be deemed to have represented and warranted to Senyun as follows: |
| i. | No Commission; No Other Consideration. No brokerage or finder’s fees or commissions are or
will be payable by the Issuer or any Subsidiaries to any broker, financial advisor or consultant, finder, placement agent investment banker,
bank or other Person in connection with the Exchange. The Issuer has not paid or given, and has not agreed to pay or give, directly or
indirectly, any commission or other remuneration for soliciting (or otherwise in connection with) the Exchange (including, without limitation,
to the Placement Agent). The applicable Exchange Amount of the Exchanging Note is the sole consideration being conveyed to the Issuer
for the issuance of the applicable New Exchange Note (and upon conversion of such New Exchange Note, the New Exchange Conversion Shares)
and no other consideration has or will be paid for such New Exchange Note. |
| ii. | 3(a)(9) Representation. The Issuer has not, nor has any person acting on its behalf, directly or
indirectly made any offers or sales of any security or solicited any offers to buy any security under circumstances that would cause the
Exchange and the issuance of the applicable New Exchange Note (and upon conversion of such New Exchange Notes, the New Exchange Conversion
Shares) pursuant to such Exchange to be integrated with prior offerings by the Issuer for purposes of the Securities Act, which would
prevent the Issuer from delivering such applicable New Exchange Note (and upon conversion of such New Exchange Note, the New Exchange
Conversion Shares) to the Holder pursuant to Section 3(a)(9) of the Securities Act, nor will the Issuer take any action or steps that
would cause the applicable Exchange, issuance and delivery of such New Exchange Note (and upon conversion of such New Exchange Note, the
New Exchange Conversion Shares) to be integrated with other offerings to the effect that the delivery of such New Exchange Note (and upon
conversion of such New Exchange Note, the New Exchange Conversion Shares) to Senyun would be seen not to be exempt pursuant to Section
3(a)(9) of the 1933 Act. |
| iii. | No Third-Party Advisors. Other than legal counsel, the Issuer has not (and will not have) engaged
any third parties to assist in the solicitation with respect to the Exchange. |
| (j) | Amendments to certain Notes issued under the Secured SPA. |
| (i) | The Floor Price in each of the Notes issued to Senyun or one of its Affiliates under the Secured SPA shall
be amended and restated as 20% of the Minimum Price (as defined in IM-5635-1 of the Nasdaq Stock Market) as of the Trading Day ended immediately
prior to the time of signing of this Agreement (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or
other similar transactions occurring thereafter). |
| (k) | Reservation of Shares. Notwithstanding anything in any agreement of the Issuer to the contrary,
at any time any Tranche A Notes, Tranche B Notes, Tranche C Notes or Tranche D Notes remain outstanding (and any New Senyun Notes, Additional
Notes and/or New Exchange Notes then outstanding or then issuable in connection with a transaction in which such determination is being
made) (collectively, the “Applicable Notes”), the Issuer shall use reasonable best efforts to at all times have authorized,
and reserved for the purpose of issuance, no less than 100% of the maximum number of shares of Common Stock issuable upon conversion of
all the Applicable Notes then outstanding and any New Senyun Notes, Additional Notes and/or New Exchange Notes then issuable in connection
with a transaction in which such determination is being made (assuming for purposes hereof that any conversion of any Applicable Note
shall not take into account any limitations on the conversion of such Applicable Note set forth in such Applicable Note), (collectively,
the “Required Reserve Amount”); provided that at no time shall the number of shares of Common Stock reserved pursuant
to this Section 4(k) be reduced other than proportionally in connection with any conversion, exchange and/or redemption, as applicable
of such Applicable Note. If at any time the number of shares of Common Stock authorized and reserved for issuance is not sufficient to
meet the Required Reserve Amount, the Issuer will use reasonable best efforts to promptly take all corporate action necessary to authorize
and reserve a sufficient number of shares, including, without limitation, calling a special meeting of stockholders to authorize additional
shares to meet the Issuer’s obligations pursuant to this Agreement, in the case of an insufficient number of authorized shares,
obtain stockholder approval of an increase in such authorized number of shares, and voting the management shares of the Issuer in favor
of an increase in the authorized shares of the Issuer to ensure that the number of authorized shares is sufficient to meet the Required
Reserve Amount. |
Section 5. Address and Payment
Instructions. The Additional Purchaser specifies as its address for notices and its lending office for all Notes the offices set forth
below:
Notice Address:
Senyun International
Ltd.
Flat/Rm 1121 11/F,
Ocean Centre Harbour
City, Hong Kong
Attention: Bo Zhang
Telephone: +85252341391
Email: zhangbo@daguanhk.com
All payments to the Additional
Purchaser under the Securities Purchase Agreement shall be made as provided in the Securities Purchase Agreement in accordance with separate
instructions delivered to the Additional Purchaser.
Section 6. Fees and Expenses.
| (a) | Upon the occurrence of the Third Amendment Effective Date, the Issuer hereby agrees to pay the Additional
Purchaser a one-time $225,000 working fee for the reimbursement of costs and expenses in connection with diligence and transactions contemplated
hereby, which fee shall be paid by allowing the Additional Purchaser to net fund any New Senyun Notes issued on the Third Amendment Effective
Date. |
| (b) | The Issuer hereby agrees to reimburse the Additional Purchaser for reasonable and documented out-of-pocket
legal expenses incurred in connection with this Agreement, the Secured SPA and the transaction related thereto in an amount not to exceed
$262,500 which shall be paid by allowing the Additional Purchaser to net fund any New Senyun Notes issued on the Third Amendment Effective
Date. |
Section 7. Effectiveness
of Agreement. This Agreement shall be effective on the date (the “Third Amendment Effective Date”) that each of
the following conditions are satisfied or waived by the Additional Purchaser:
| (a) | this Agreement shall have been executed by the Issuer, Additional Purchaser, and each of the Closing Date
Purchasers; |
| (b) | the Issuer has delivered to the Additional Purchaser fully executed copies of all New Senyun Notes in
an aggregate principal amount of the Additional Purchaser’s New Senyun Note Commitments; |
| (c) | subject to the Note Waivers (including any cross-default under this Agreement or the Securities Purchase
Agreement, in each case, that may arise as a matter of any Default or Event of Default under the Secured SPA), no Default or Event of Default exists; provided, however, that Senyun hereby
retains any right to preserve any potential dispute with regards to a conversion notice that Senyun delivered to the Issuer in May 2023; and |
| (d) | subject to the Note Waivers (including any cross-default under this Agreement or the Securities Purchase
Agreement, in each case, that may arise as a matter of any Default or Event of Default under the Secured SPA), the
representations and warranties contained in the Financing Documents are true and correct in all material respects (without duplication
of any materiality qualifier) as of such date; provided, however, that Senyun hereby retains any right to preserve
any potential dispute with regards to a conversion notice that Senyun delivered to the Issuer in May 2023. |
Section 8. Additional Agreements
of Issuer. The Issuer hereby agrees that the Additional Purchaser shall be a Purchaser under the Securities Purchase Agreement and
shall be issued Notes as set forth herein. The Issuer agrees that the Additional Purchaser shall have all of the rights and remedies of
a Purchaser under the Securities Purchase Agreement and the other Financing Documents as if the Additional Purchaser were an original
Purchaser under and signatory to the Securities Purchase Agreement. Further, for so long as the Additional Purchaser remains a Purchaser
under the Securities Purchase Agreement, it shall be entitled to the indemnification provisions from the Issuer in favor of the Purchasers
as provided in the Securities Purchase Agreement and the other Financing Documents.
Section 9. Governing
Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 10. Counterparts.
This Agreement may be executed in any number of counterparts each of which, when taken together, shall constitute one and the same agreement.
Delivery of an executed signature page of this Agreement by facsimile transmission or by electronic mail as a “.pdf” or “.tif”
attachment shall be effective as delivery of a manually executed counterpart hereof.
Section 11. Headings.
Section headings have been inserted herein for convenience only and shall not be construed to be a part hereof.
Section 12. Amendments;
Waivers. This Agreement may not be amended, changed, waived or modified except by a writing executed by the Additional Purchaser
and the Issuer, except that the Additional Purchaser may elect to
unilaterally waive, in its sole discretion, any of the conditions set forth herein or otherwise waive or modify terms hereof in
accordance Section 12.5 of the Securities Purchase Agreement. Any waiver of any provision of this Agreement or any other Financing
Document 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 Additional Purchaser in the exercise of any right, power or remedy shall operate as a waiver thereof, nor shall any single or
partial exercise by any of them of any right, power or remedy preclude other or further exercise thereof, or the exercise of any
other right, power or remedy.
Section 13. Binding
Effect. This Agreement shall be binding upon the Additional Purchaser, and its successors and permitted assigns and shall inure to
the benefit of the Issuer, and the Purchasers, and their respective successors and permitted assigns. For the avoidance of doubt, Additional
Purchaser shall be permitted to assign its rights and obligations hereunder to any party in accordance with the terms of the Securities
Purchase Agreement.
Section 14. Definitions.
Terms not otherwise defined herein are used herein with the respective meanings given them in the Securities Purchase Agreement.
Section 15. Entire
Agreement. This Agreement embodies the entire agreement of the parties with respect to the subject matter hereof and supersedes all
other prior arrangements and understandings relating to the subject matter hereof. In the event of a conflict between this Agreement and
the Securities Purchase Agreement, this Agreement shall control.
Section 16. Consent.
Each of the Closing Date Purchasers hereby consent to all of the terms provided in this Agreement, in all respects, for all purposes under
the Securities Purchase Agreement.
Section
17. Adjustments to Conversion and Exercise Prices. For the avoidance of doubt, nothing contained herein, or in the specific
amendments with respect to the Secured SPA, the Notes under the Securities Purchase Agreement or the Notes under the Secured SPA, as
applicable, shall trigger any adjustment to the conversion or exercise price under the Notes or Warrants under the Secured SPA and
Securities Purchase Agreement. Furthermore, each of Senyun, FF Simplicity Ventures LLC and FF Prosperity Ventures LLC, hereby waive
any such rights to any adjustment to the conversion or exercise price in each of the Secured SPA and/or the Securities Purchase
Agreement, as applicable, and the related Notes and Warrant. For clarity, the foregoing does not impact Senyun’s ability to,
and Senyun hereby retains any right to, preserve and/or pursue any potential dispute with regards to a conversion notice that Senyun
delivered to the Issuer in May 2023.
Section 18. Disclosure of
Transaction. The Issuer shall, on or before 8:30 a.m., New York City time, on the date immediately following the date of this Agreement,
file a Current Report on Form 8-K describing the terms of the transactions contemplated hereby in the form required by the 1934 Act and
attaching this Agreement, to the extent they are required to be filed under the 1934 Act, that have not previously been filed with the
Securities and Exchange Commission by the Issuer (including, without limitation, this Agreement) as exhibits to such filing (including
all attachments, the “8-K Filing”). From and after the filing of the 8-K Filing, the Issuer shall have disclosed all
material, non-public information (if any) provided up to such time to the Purchasers under the Securities Purchase Agreement and Secured
SPA by the Issuer or any of its Subsidiaries or any of their respective officers, directors, employees or agents. In addition, effective
upon the filing of the 8-K Filing, the Issuer acknowledges and agrees that any and all confidentiality or similar obligations under any
agreement with respect to the transactions contemplated by this Agreement or as otherwise disclosed in the 8-K Filing, whether written
or oral, between the Issuer, any of its Subsidiaries or any of their respective officers, directors, affiliates, employees or agents,
on the one hand, and any of the Purchasers under the Securities Purchase Agreement and Secured SPA or any of their affiliates, on the
other hand, shall terminate. Neither the Issuer, its Subsidiaries nor the Purchasers under the Securities Purchase Agreement and Secured
SPA shall issue any press releases or any other public statements with respect to the transactions contemplated hereby; provided,
however, the Issuer shall be entitled, without the prior approval of the Purchasers under the Securities Purchase Agreement
and Secured SPA, to make a press release or other public disclosure with respect to such transactions (i) in substantial conformity with
the 8-K Filing and contemporaneously therewith or (ii) as is required by applicable law and regulations or requested by a governmental
authority or self-regulatory organization (provided that in the case of clause (i) the Purchasers under the Securities Purchase Agreement
and Secured SPA shall be consulted by the Issuer in connection with any such press release or other public disclosure prior to its release).
Without the prior written consent of the Purchasers under the Securities Purchase Agreement and Secured SPA (which may be granted or withheld
in the Purchasers’ under the Securities Purchase Agreement and Secured SPA sole discretion), except as required by applicable law
or requested by a governmental authority or self-regulatory organization, the Issuer shall not (and shall cause each of its Subsidiaries
and affiliates to not) disclose the name of any Purchaser under the Securities Purchase Agreement or Secured SPA in any filing, announcement,
release or otherwise.
[Signatures on following page]
IN WITNESS WHEREOF, the undersigned
has duly executed this Agreement as of the date and year first written above.
|
SENYUN INTERNATIONAL LTD. |
|
|
|
By: |
/s/ Zhang Bo |
|
|
Name: |
Zhang Bo |
|
|
Title: |
Chief Executive Officer |
[Signatures Continued on Next Page]
[Signature Page to Second Joinder and Amendment Agreement]
Accepted and Agreed as of the date first written above.
|
FARADAY FUTURE INTELLIGENT ELECTRIC INC., as Issuer |
|
|
|
By: |
/s/ Xuefeng Chen |
|
Name: |
Xuefeng Chen |
|
Title: |
Global CEO |
[Signature Page to Second Joinder and Amendment Agreement]
SCHEDULE 1
Amended and Restated Commitment Annex
Purchaser | |
Commitment
Amount | |
Metaverse Horizon Limited | |
$ | 80,000,000 | |
V W Investment Holding Limited | |
$ | 20,000,000 | |
FF Vitality Ventures LLC | |
$ | 40,000,000 | |
Senyun International Ltd. | |
$ | 30,000,000 | |
TOTAL | |
$ | 170,000,000 | |
Exhibit 10.4
Execution Version
THIS SECURITY HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT COMPLIANCE
WITH THE REGISTRATION OR QUALIFICATION PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS THEREFROM.
THE HOLDER HEREOF SHOULD CONTACT THE RESPONSIBLE
OFFICER OF THE ISSUER AT THE ISSUER’S PRINCIPAL OFFICE, CURRENTLY 18455 SOUTH FIGUEROA STREET, LOS
ANGELES, CALIFORNIA 90248, TO OBTAIN THE INFORMATION RELATED TO THIS NOTE’S ORIGINAL ISSUE DISCOUNT CALCULATIONS. THIS LEGEND
IS INTENDED TO SATISFY THE ORIGINAL ISSUE DISCOUNT REPORTING REQUIREMENTS UNDER TREASURY REGULATIONS SECTION 1.1275-3.
Unsecured Convertible Senior Promissory Note
Up to $40,000,000 |
New York, New York |
|
June 26, 2023 |
FF Vitality Ventures LLC (“Holder”)
hereby agrees to fund the undersigned (the “Issuer”) via wire transfer of immediately available funds (a) $5,000,000
within five (5) Business Days after the satisfaction of the Closing Conditions or such earlier Business Day as designated by the Holder
by notice to the Issuer (the “First Closing”), (b) an additional $5,000,000 within fifteen (15) Business Days after
the First Closing (the “Second Closing”), (c) $5,000,000 within fifteen (15) Business Days after the Second Closing
(the “Third Closing”), (d) an additional $5,000,000 within fifteen (15) Business Days after the satisfaction of the
Closing Conditions (the “Fourth Closing”), (e) an additional $5,000,000 within fifteen (15) Business Days after the
Fourth Closing (the “Fifth Closing”), (f) an additional $5,000,000 within fifteen (15) Business Days after the Fifth
Closing (the “Sixth Closing”), (g) an additional $5,000,000 within fifteen (15) Business Days after the Sixth Closing
(the “Seventh Closing”), and (h) $5,000,000 within fifteen (15) Business Days after the Seventh Closing (the “Eighth
Closing”, and each of the First Closing, the Second Closing, the Third Closing, the Fourth Closing, the Fifth Closing, the Sixth
Closing, the Seventh Closing and the Eighth Closing, a “Closing”), in each case subject to postponement or cancellation
as set forth in the Securities Purchase Agreement dated as of May 8, 2023 among the Issuer and the purchasers from time to time party
thereto, as amended by that certain Amendment No. 1, dated as of June 26, 2023, by and among the Issuer and the purchasers party thereto
and that certain Joinder and Amendment Agreement, dated as of June 26, 2023, by and among Holder and certain other parties set forth on
the signature pages thereto (the “Purchase Agreement”); provided that, to the extent that any such Closing does
not occur by the date set forth above, the Holder shall have 5 additional Business Days to deliver such funds to the Issuer and cause
such Closing to occur. The Closing Conditions shall be required to have been satisfied for each Closing hereunder unless waived for such
Closing (and only for such Closing) by the Holder. If and to the extent that the VWAP for the Common Stock is less than $0.10 for the
five (5) Trading Days ending on a Closing date, such Closing date shall be delayed until the date that the VWAP for the Common Stock is
equal to or greater than $0.10. In consideration of the foregoing, the Issuer hereby promises to pay to the Holder at the office of the
Holder at 17 State Street, Suite 2100, New York, NY 10004, or at such other place as Holder may from time to time designate in writing
to the Issuer, in lawful money of the United States of America and in immediately available funds, the principal sum of the amount funded
by the Holder at the First Closing, the Second Closing, the Third Closing, the Fourth Closing, the Fifth Closing, the Sixth Closing, the
Seventh Closing and the Eighth Closing (up to an aggregate of $40,000,000) subject to a ten percent (10%) original issue discount and
the other terms and conditions set forth in this Unsecured Convertible Senior Promissory Note (this “Note”).
The outstanding principal
balance of the portion of the Note evidenced by this Note shall be due and payable on the date that is six (6) years after the Eighth
Closing (the “Maturity Date”), and the outstanding principal amount and accrued but unpaid interest on this Note may
be prepaid by the Issuer at any time in cash (subject to the same prepayment premium percentage for the Notes issued under the Purchase
Agreement) after providing fifteen (15) days’ prior written notice to the Holder (during which time the Holder may convert this
Note subject to the terms and conditions herein in lieu of prepayment, and upon such prepayment this Note shall be terminated).
“Beneficial Ownership
Limitation” shall have the meaning set forth in Section 3(d).
“Buy-In”
shall have the meaning set forth in Section 3(c)(v).
“Closing
Conditions” means receipt by the Issuer of (a) an effective Registration Statement with respect to the Underlying Shares for
such Closing under the Securities Purchase Agreement and (b) the Issuer shall have reserved the Required Reserve Amount (as defined in
Section 4(k) of that certain Joinder and Amendment Agreement, by and among the Holder and the Issuer, dated June 26, 2023 (the “Joinder”))
of shares of Common Stock underlying the Applicable Notes (as defined in the Joinder, including any New Notes to be issued at such applicable
Closing) as required pursuant to Section 4(k) of the Joinder in full as of such Closing Date.
“Conversion”
shall have the meaning ascribed to such term in Section 3(a).
“Conversion
Date” shall have the meaning set forth in Section 3(a).
“Conversion
Price” shall have the meaning set forth in Section 3(b).
“Conversion Shares”
means, collectively, the shares of Common Stock issuable upon conversion of this Note in accordance with the terms hereof.
“Dilutive
Issuance” shall have the meaning set forth in Section 4(b).
“Dilutive
Issuance Notice” shall have the meaning set forth in Section 4(b).
“Equity Conditions”
means, each of the days during the period in question, (a) the Issuer shall have duly honored all conversions scheduled to occur or occurring
by virtue of one or more Notices of Conversion of the Holder, if any, after receipt of Issuer stockholder approval to increase the Issuer’s
authorized and uncommitted shares of Class A common stock (“Common Stock”) to authorize the entirety of the excess
of the Underlying Shares over the Reserved Shares (each as defined in the Purchase Agreement) for issuance (which approval, for the avoidance
of doubt, may be implemented by the Issuer through a reverse stock split that increases the number of authorized shares of the Issuer’s
Class A common stock) and for purposes of NASDAQ Listing Rule 5635 to the extent needed (the “Shareholder Approval”)
(and the filing of an amendment to the Issuer’s certificate of incorporation to reflect the Shareholder Approval to the extent needed)
and an effective Registration Statement for the applicable shares, (b) the Issuer shall have paid all liquidated damages and other amounts
owing to the Holder in respect of this Note, (c)(i) there is an effective Registration Statement pursuant to which the Holder is permitted
to utilize the prospectus thereunder to resell all of the shares of Common Stock issuable pursuant to this Note (and the Issuer believes,
in good faith, that such effectiveness will continue uninterrupted for the foreseeable future) or (ii) all of the Conversion Shares issuable
pursuant to this Note (and shares issuable in lieu of cash payments of interest) may be resold pursuant to Rule 144 without volume or
manner-of-sale restrictions or current public information requirements as determined by counsel to the Issuer, (d) the Common Stock is
trading on a Trading Market and all of the shares issuable pursuant to this Note are listed or quoted for trading on such Trading Market
(and the Issuer believes, in good faith, that trading of the Common Stock on a Trading Market will continue uninterrupted for the next
five (5) Trading Days), (e) there is a sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock for
the issuance of all of the shares then issuable pursuant to this Note after receipt of the Shareholder Approval (and the filing of an
amendment to the Issuer’s certificate of incorporation to reflect the Shareholder Approval to the extent needed) and an effective
Registration Statement for the applicable shares, (f) the issuance of the shares in question to the Holder would not violate the limitations
set forth in Section 3(d) and Section 3(e) herein, (g) there has been no public announcement of a pending or proposed Fundamental Transaction
that has not been consummated, (h) the applicable Holder is not in possession of any information provided by the Issuer, any of its Subsidiaries,
or any of their officers, directors, employees, agents or Affiliates, that constitutes, or may constitute, material non-public information
and (h) there shall not have occurred any Volume Failure or Price Failure as of such applicable date of determination.
“Exempt Issuance”
means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Issuer pursuant to any stock or
option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority of the members
of a committee of non-employee directors established for such purpose for services rendered to the Issuer, (b) securities upon the exercise
or exchange of or conversion of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible
into shares of Common Stock issued and outstanding on the date of the Eighth Closing, provided that such securities have not been amended
since the date of the Eighth Closing to increase the number of such securities or to decrease the exercise price, exchange price or conversion
price of such securities (other than in connection with stock splits or combinations) or to extend the term of such securities, (c) securities
issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Issuer, provided
that any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an
operating Issuer or an owner of an asset and shall provide to the Issuer additional benefits in addition to the investment of funds, but
shall not include a transaction in which the Issuer is issuing securities primarily for the purpose of raising capital or to an entity
whose primary business is investing in securities; (d) any shares of Common Stock or securities exercisable or exchangeable for or convertible
into shares of Common Stock in an aggregate amount not to exceed $50,000,000 (excluding any Notes or the Warrants issued under the Amended
and Restated Securities Purchase Agreement entered into by the Issuer on February 3, 2023, as amended from time to time, the “Secured
Purchase Agreement”) after the date hereof; provided that, with respect to this clause (d), the issuance, conversion or exercise
(as applicable) price per share at the time of issuance of such Common Stock or security (as applicable) is not less than $0.55 per share
of Common Stock (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions occurring
after the date hereof); and (e) the issuance of the Exchange Notes and Tranche A and B Notes and Warrants under the Secured Purchase Agreement
and the shares of Common Stock thereunder.
“Floor Price”
means $0.05 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions occurring
after the date hereof) (or such lower amount as may be permitted by the principal Trading Market of the Common Stock from time to time).
“Fundamental
Transaction” shall have the meaning set forth in Section 4(e).
“Interest Conversion
Rate” means the greater of (x) the Floor Price and (y) 90% of the lowest VWAP for the 5 consecutive Trading Days ending on the
Trading Day that is immediately prior to the date on which interest is paid in shares of Common Stock.
“Interest
Conversion Shares” shall have the meaning set forth in Section 2(a).
“Interest
Notice Period” shall have the meaning set forth in Section 2(a).
“Interest
Payment Date” shall have the meaning set forth in Section 2(a).
“Interest
Share Amount” shall have the meaning set forth in Section 2(a).
“Issuable
Maximum” shall have the meaning set forth in Section 3(e).
“Make-Whole
Amount” shall have the meaning set forth in Section 3(c)(i).
“Note Register”
shall have the meaning set forth in Section 2(c).
“Notice
of Conversion” shall have the meaning set forth in Section 3(a).
“Price Failure”
means, with respect to a particular date of determination, the VWAP of the Common Stock on any Trading Day during the seven (7) Trading
Day period ending on the Trading Day immediately preceding such date of determination fails to exceed the Floor Price (as adjusted for
stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions occurring after the date hereof). All
such determinations to be appropriately adjusted for any stock splits, stock dividends, stock combinations, recapitalizations or other
similar transactions during any such measuring period.
“Registration Statement”
means a registration statement covering the resale of the Underlying Shares (as defined in the Purchase Agreement) by each Holder.
“Share
Delivery Date” shall have the meaning set forth in Section 3(c)(ii).
“Trading
Day” means a day on which the principal Trading Market is open for trading.
“Trading Market”
means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the
NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange (or any
successors to any of the foregoing).
“Volume Failure”
means, with respect to a particular date of determination, the average dollar trading volume (as reported on Bloomberg, LP) of the Common
Stock on the principal Trading Market of the Common Stock during the seven (7) Trading Day period ending on the Trading Day immediately
preceding such date of determination, is less than $500,000 (as adjusted for any stock splits, stock dividends, stock combinations, recapitalizations
or other similar transactions occurring after the date hereof).
“VWAP” means,
for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted
on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the
Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a
similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock
so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the
Issuer, the fees and expenses of which shall be split by the Issuer and the Purchasers.
| (a) | The Issuer shall pay interest to the Holder on the aggregate unconverted and then outstanding principal
amount of this Note (including any Make-Whole Amount payable upon conversion of this Note) at the rate of 10 % per annum, payable on each
Conversion Date and on the Maturity Date (each such date, an “Interest Payment Date”) (if any Interest Payment Date
is not a Business Day, then the applicable payment shall be due on the next succeeding Business Day), in cash or, at the Issuer’s
option, in duly authorized, validly issued, fully paid and non-assessable shares of Common Stock (the “Interest Conversion Shares”)
at the Interest Conversion Rate (the dollar amount to be paid in shares, the “Interest Share Amount”) or a combination
thereof; provided, however, that payment in shares of Common Stock may only occur if (i) all of the Equity Conditions have
been met (unless waived by the Holder in writing) on the applicable Interest Payment Date (the “Interest Notice Period”)
and through and including the date such shares of Common Stock are actually issued to the Holder, (ii) the Issuer shall have given the
Holder notice in accordance with the notice requirements set forth below (other than the Make-Whole Amount which shall require notice
from the Issuer within three (3) Trading Days of a Notice of Conversion), and (iii) as to any Interest Share Amount, the effective rate
of interest shall be calculated at 15% per annum. Notwithstanding anything to the contrary, during any periods that the Note is outstanding
and an Event of Default is occurring, the interest rate shall be 15% per annum if paid in cash only and 18% if paid in cash and stock
otherwise as set forth above. |
| (b) | Subject to the terms and conditions herein, the decision whether to pay interest hereunder in cash, shares
of Common Stock or a combination thereof shall be at the sole discretion of the Issuer. Prior to the commencement of any Interest Notice
Period, the Issuer shall deliver to the Holder a written notice of its election to pay interest hereunder on the applicable Interest Payment
Date either in cash, shares of Common Stock or a combination thereof (other than with respect to any Make-Whole Payment which election
shall be made within three (3) Trading Days of the applicable Conversion Date). During any Interest Notice Period (or after the election
is made in connection with a Make-Whole Payment), the Issuer’s election (whether specific to an Interest Payment Date or continuous)
shall be irrevocable as to such Interest Payment Date. Subject to the aforementioned conditions, failure to timely deliver such written
notice to the Holder shall be deemed an election by the Issuer to pay the interest on such Interest Payment Date in cash. |
| (c) | Interest shall be calculated on the basis of a 360-day year, consisting of twelve 30 calendar day periods,
and shall accrue daily commencing on the date of the Eighth Closing until payment in full of the outstanding principal, together with
all accrued and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made. Payment of interest
in shares of Common Stock (other than the Interest Conversion Shares issued prior to an Interest Notice Period) shall otherwise occur
pursuant to Section 3 herein and, solely for purposes of the payment of interest in shares, the Interest Payment Date shall be deemed
the Conversion Date. Interest shall cease to accrue with respect to any principal amount converted, provided that, the Issuer actually
delivers the Conversion Shares within the time period required by Section 3(c) herein. Interest hereunder will be paid to the Person in
whose name this Note is registered on the records of the Issuer regarding registration and transfers of this Note (the “Note
Register”). Except as otherwise provided herein, if at any time the Issuer pays interest partially in cash and partially in
shares of Common Stock to the holders of the Notes, then such payment of cash shall be distributed ratably among the holders of the then-outstanding
Notes based on their (or their predecessor’s) initial purchases of Notes pursuant to the Purchase Agreement. |
| (d) | All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate
equal to the lesser of 18% per annum or the maximum rate permitted by applicable law (the “Late Fees”) which shall
accrue daily from the date such interest is due hereunder through and including the date of actual payment in full. Notwithstanding anything
to the contrary contained herein, if, on any Interest Payment Date the Issuer has elected to pay accrued interest in the form of Common
Stock but the Issuer is not permitted to pay accrued interest in Common Stock because it fails to satisfy the conditions for payment in
Common Stock set forth in Section 2(a) herein, then, at the option of the Holder, the Issuer, in lieu of delivering either shares of Common
Stock pursuant to this Section 2 or paying the interest payment in cash, shall deliver, within three (3) Trading Days of each applicable
Interest Payment Date, an amount in cash equal to the product of (x) the number of shares of Common Stock otherwise deliverable to the
Holder in connection with the payment of interest due on such Interest Payment Date multiplied by (y) the highest VWAP during the period
commencing on the Interest Payment Date and ending on the Trading Day prior to the date such payment is actually made. |
| (a) | Voluntary Conversion. At any time until this Note is no longer outstanding, subject to Section
3(e), this Note shall be convertible, in whole or in part, into shares of Common Stock at the option of the Holder, at any time and from
time to time (subject to the conversion limitations set forth in Section 3(d) and Section 3(e) hereof) (each a “Conversion”).
The Holder shall effect conversions by delivering to the Issuer a Notice of Conversion, the form of which is attached hereto as Annex
A (each, a “Notice of Conversion”), specifying therein the principal amount of this Note to be converted, the Make-Whole
Amount (as defined below) and the date on which such conversion shall be effected (such date, the “Conversion Date”).
If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is
deemed delivered hereunder. No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of
guarantee or notarization) of any Notice of Conversion form be required. To effect conversions hereunder, the Holder shall not be required
to physically surrender this Note to the Issuer unless the entire principal amount of this Note, plus all accrued and unpaid interest
thereon, has been so converted in which case the Holder shall surrender this Note as promptly as is reasonably practicable after such
conversion without delaying the Issuer’s obligation to deliver the shares on the Share Delivery Date. Conversions hereunder shall
have the effect of lowering the outstanding principal amount of this Note in an amount equal to the applicable conversion. The Holder
and the Issuer shall maintain records showing the principal amount(s) converted and the date of such conversion(s). The Issuer may deliver
an objection to any Notice of Conversion within one (1) Business Day of delivery of such Notice of Conversion. The Holder, and any
assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of
a portion of this Note, the unpaid and unconverted principal amount of this Note may be less than the amount stated on the face hereof. |
| (b) | Conversion Price. The conversion price in effect on any Conversion Date shall be $0.8925 subject
to adjustment as set forth herein (the “Conversion Price”). |
| (c) | Mechanics of Conversion. |
| i. | Conversion Shares Issuable Upon Conversion of Principal Amount. The number of Conversion Shares
issuable upon a conversion hereunder shall be determined by the quotient obtained by dividing the outstanding principal amount of this
Note to be converted by the Conversion Price. Additionally, on each Conversion Date, the Issuer shall pay to the Holder, in cash, the
sum of (A) all accrued interest on this Note to date plus (B) all interest that would otherwise accrue on such principal amount of this
Note if such converted principal would be held to six (6) years from the date hereof (the amount in clause (B), (the “Make-Whole
Amount”) minus (C) 50% of the original issue discount in respect of such converted portion of this Note; provided, however,
at the election of the Issuer, such interest and Make-Whole Amount may be paid in a combination of cash and Common Stock, otherwise pursuant
to the terms of Section 2. |
| ii. | Delivery of Conversion Shares Upon Conversion. Not later than two (2) Trading Days after each Conversion
Date (the “Share Delivery Date”), the Issuer shall deliver, or cause to be delivered, to the Holder (A) the Conversion
Shares which, on or after the earlier of (i) the six month anniversary of the Eighth Closing to the extent permitted under the Securities
Act or (ii) the Effective Date, shall be free of restrictive legends and trading restrictions (other than those which may then be required
by the Purchase Agreement) representing the number of Conversion Shares being acquired upon the conversion of this Note and (B) a bank
check in the amount of accrued and unpaid interest (if the Issuer has elected or is required to pay accrued interest in cash). On or after
the earlier of (i) the six-month anniversary of the Eighth Closing to the extent permitted under the Securities Act or (ii) the Effective
Date, the Issuer shall deliver any Conversion Shares required to be delivered by the Issuer under this Section 3 electronically through
the Depository Trust Company or another established clearing corporation performing similar functions. |
| iii. | Failure to Deliver Conversion Shares. If, in the case of any Notice of Conversion, such Conversion
Shares are not delivered to or as directed by the applicable Holder by the 3rd Trading Day following the Share Delivery Date,
the Holder shall be entitled to elect by written notice to the Issuer at any time on or before its receipt of such Conversion Shares,
to rescind such Conversion, in which event the Issuer shall promptly return to the Holder any original Note delivered to the Issuer and
the Holder shall promptly return to the Issuer the Conversion Shares issued to such Holder pursuant to the rescinded Conversion Notice. |
| iv. | Obligation Absolute; Partial Liquidated Damages. The Issuer’s obligations to issue and deliver
the Conversion Shares upon conversion of this Note in accordance with the terms hereof are absolute and unconditional, irrespective of
any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of
any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination,
or any breach or alleged breach by the Holder or any other Person of any obligation to the Issuer other than the terms hereof, and irrespective
of any other circumstance (other than a violation of law) which might otherwise limit such obligation of the Issuer to the Holder in connection
with the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a waiver by the
Issuer of any such action the Issuer may have against the Holder. In the event the Holder of this Note shall elect to convert any or all
of the outstanding principal amount hereof in accordance with the terms hereof, the Issuer may not refuse conversion based on any claim
that the Holder or anyone associated or affiliated with the Holder has been engaged in any violation of any other agreement or for any
other reason (other than a violation of law), unless an injunction from a court, on notice to Holder, restraining and or enjoining conversion
of all or part of this Note shall have been sought and obtained. In the absence of such injunction, the Issuer shall issue Conversion
Shares or, if applicable, cash, upon a properly noticed conversion. If the Issuer fails for any reason to deliver to the Holder such Conversion
Shares pursuant to Section 3(c)(ii) by the 3rd Trading Day following the Share Delivery Date, the Issuer shall pay to the Holder,
in cash, as liquidated damages and not as a penalty, for each $1,000 of principal amount being converted, $5 per Trading Day for each
Trading Day after such 3rd Trading Day following the Share Delivery Date until such Conversion Shares are delivered or Holder
rescinds such conversion. |
| v. | Compensation for Buy-In on Failure to Timely Deliver Conversion Shares Upon Conversion. In addition
to any other rights available to the Holder, if the Issuer fails for any reason to deliver to the Holder such Conversion Shares by the
3rd Trading Day following the Share Delivery Date pursuant to Section 3(c)(ii), and if after such 3rd Trading Day
following the Share Delivery Date the Holder is required by its brokerage firm 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 Conversion Shares which the Holder was entitled to receive upon the conversion relating to such 3rd Trading Day following
the Share Delivery Date (a “Buy-In”), then the Issuer shall (A) pay in cash to the Holder (in addition to any other
remedies available to or elected by the Holder) the amount, if any, by which (x) the Holder’s total purchase price (including any
brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock
that the Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving
rise to such purchase obligation was executed and (B) at the option of the Holder, either reissue (if surrendered) this Note in a principal
amount equal to the principal amount of the attempted conversion (in which case such conversion shall be deemed rescinded) or deliver
to the Holder the number of shares of Common Stock that would have been issued if the Issuer had timely complied with its delivery requirements
under Section 4(c)(ii). 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 conversion of this Note with respect to which the actual sale price of the Conversion Shares (including any brokerage
commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately preceding sentence, the
Issuer shall be required to pay the Holder $1,000. The Holder shall provide the Issuer written notice indicating the amounts payable to
the Holder in respect of the Buy-In and, upon request of the Issuer, evidence of the amount of such loss. |
| vi. | Reservation of Shares Issuable Upon Conversion. The Issuer covenants that it will at all times
after receipt of the Shareholder Approval (and the filing of an amendment to the Issuer’s certificate of incorporation to reflect
the Shareholder Approval to the extent needed) keep available out of its authorized and unissued shares of Common Stock for the sole purpose
of issuance upon conversion of this Note and payment of interest on this Note, each as herein provided, free from preemptive rights or
any other actual contingent purchase rights of Persons other than the Holder (and the other holders of the Notes), not less than such
aggregate number of shares of the Common Stock as shall (subject to the terms and conditions set forth in the Purchase Agreement) be issuable
(taking into account the adjustments and restrictions of Sections 3(d) and (e)) upon the conversion of the then outstanding principal
amount of this Note and payment of interest hereunder. The Issuer covenants that all shares of Common Stock that shall be so issuable
shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable and, if the Registration Statement is then effective
under the Securities Act, shall be registered for public resale in accordance with such Registration Statement. |
| vii. | Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued
upon the conversion of this Note. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion,
the Issuer 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 Conversion Price or round up to the next whole share. |
| viii. | Transfer Taxes and Expenses. The issuance of Conversion Shares on conversion of this Note shall
be made without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or
delivery of such Conversion Shares, provided that the Issuer shall not be required to pay any tax that may be payable in respect of any
transfer involved in the issuance and delivery of any such Conversion Shares upon conversion in a name other than that of the Holder of
this Note so converted and the Issuer shall not be required to issue or deliver such Conversion Shares unless or until the Person or Persons
requesting the issuance thereof shall have paid to the Issuer the amount of such tax or shall have established to the satisfaction of
the Issuer that such tax has been paid. The Issuer shall pay all Transfer Agent fees required for same-day processing of any Notice of
Conversion and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required
for same-day electronic delivery of the Conversion Shares. |
| (d) | Holder’s Conversion Limitations. The Issuer shall not effect any conversion of this Note,
and a Holder shall not have the right to convert any portion of this Note, to the extent that after giving effect to the conversion set
forth on the applicable Notice of Conversion, 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 conversion of this Note 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 this Note beneficially
owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or unconverted
portion of any other securities of the Issuer subject to a limitation on conversion or exercise analogous to the limitation contained
herein (including, without limitation, any other Notes or the Warrants) 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 3(d), 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 3(d) applies, the determination of whether this Note is convertible (in relation to other securities owned by
the Holder together with any Affiliates and Attribution Parties) and of which principal amount of this Note is convertible shall be in
the reasonable discretion of the Holder, and the submission of a Notice of Conversion shall be deemed to be the Holder’s determination
of whether this Note may be converted (in relation to other securities owned by the Holder together with any Affiliates or Attribution
Parties) and which principal amount of this Note is convertible, in each case subject to the Beneficial Ownership Limitation, and the
Issuer 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 3(d), in determining the number of outstanding shares of Common Stock, the Holder may rely on
the number of outstanding shares of Common Stock as reflected in (A) the Issuer’s most recent periodic or annual report filed with
the Commission, as the case may be, (B) a more recent public announcement by the Issuer, or (C) a more recent written notice by the Issuer
or the Issuer’s transfer agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request
of a Holder, the Issuer shall within two (2) Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock
then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion
or exercise of securities of the Issuer, including this Note, by the Holder 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 4.99% of the number
of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion
of this Note. The Holder, upon notice to the Issuer, may increase or decrease the Beneficial Ownership Limitation provisions of this Section
3(d); provided that the Beneficial Ownership Limitation in no event exceeds 4.99% 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 this Note held by the Holder and the Beneficial
Ownership Limitation provisions of this Section 3(d) 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 Issuer. 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 3(d)
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 holder of this Note. Holder shall not vote or control the vote of shares of Common
Stock of the Issuer in excess of 9.99% of the number of shares of Common Stock of the Issuer outstanding immediately after giving effect
to the issuance of shares of Common Stock upon conversion of this Note (the “Vote Threshold”); provided, that Issuer
acknowledges and agrees that Holder may own in excess of the Vote Threshold; provided, that Holder has irrevocably transferred to a non-affiliated
U.S. entity voting rights of all shares of Common Stock of Issuer in excess of such Vote Threshold. |
| (e) | Issuance Limitations. Notwithstanding anything herein to the contrary, to the extent needed, if
the Issuer has not obtained Shareholder Approval, then the Issuer may not issue, upon conversion of this Note, shares of Common Stock;
provided that, for the avoidance of doubt and notwithstanding the foregoing, the Issuer may issue up to 136,788,522 shares of Common
Stock (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions occurring after
the date hereof) upon conversion of this Note prior to obtaining Shareholder Approval, as long as there are sufficient authorized but
unissued and uncommitted shares. |
| (f) | Transfer Restriction. Notwithstanding anything to the contrary in this Note, the shares of Common
Stock underlying the principal amount of this Note funded at each such Closing may be directly or indirectly transferred, sold or otherwise
disposed of. For the avoidance of doubt, nothing in this Section 3(f) shall restrict the ability of the Holder to pledge shares of Common
Stock issued upon conversion of this Note. |
| Section 4. | Certain Adjustments. |
| (a) | Stock Dividends and Stock Splits. If the Issuer, at any time while this Note is outstanding: (i)
pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or
any Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Issuer upon conversion
of, or payment of interest on, the Notes), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines
(including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues, in the
event of a reclassification of shares of the Common Stock, any shares of capital stock of the Issuer, then the Conversion Price shall
be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the
Issuer) outstanding immediately before such event, and of which the denominator shall be the number of shares of Common Stock outstanding
immediately after such event. Any adjustment made pursuant to this Section 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) | Subsequent Equity Sales. If, at any time while this Note is outstanding, the Issuer or any Subsidiary,
as applicable, sells or grants any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues (or
announces any sale, grant or any option to purchase or other disposition), any Common Stock or Common Stock Equivalents entitling any
Person to acquire shares of Common Stock at an effective price per share that is lower than the then Conversion Price (such issuances,
collectively, a “Dilutive Issuance” and such effective price, the “Base Price”)) (if the holder
of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset
provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued
in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share that is lower than the
Conversion Price, such issuance shall be deemed to have occurred for less than the Conversion Price on such date of the Dilutive Issuance),
then simultaneously with the consummation (or, if earlier, the announcement) of each Dilutive Issuance the Conversion Price shall be reduced
to equal the Base Price. Notwithstanding the foregoing, no adjustment will be made under this Section 4(b) in respect of an Exempt Issuance
or an adjustment under Section 4(a). The Issuer shall notify the Holder in writing, no later than the Trading Day following the issuance
of any Common Stock or Common Stock Equivalents subject to this Section 4(b), indicating therein the applicable issuance price, or applicable
reset price, exchange price, conversion price and other pricing terms (such notice, the “Dilutive Issuance Notice”).
For purposes of clarification, whether or not the Issuer provides a Dilutive Issuance Notice pursuant to this Section 4(b), upon the occurrence
of any Dilutive Issuance, the Holder is entitled to receive a number of Conversion Shares based upon the adjusted Conversion Price on
or after the date of such Dilutive Issuance, regardless of whether the Holder accurately refers to the adjusted Conversion Price in the
Notice of Conversion. |
| (c) | Voluntary Adjustment. Subject to the rules and regulations of the principal Trading Market of the
Common Stock, the Issuer may at any time during the term of this Note, with the prior written consent of the Holder, reduce the then current
Conversion Price of this Note to any amount and for any period of time deemed appropriate by the board of directors of the Issuer. |
| (e) | Fundamental Transaction. If, at any time while this Note is outstanding, (i) the Issuer, directly
or indirectly, in one or more related transactions effects any merger or consolidation of the Issuer with or into another Person, (ii)
the Issuer (and all of its Subsidiaries, taken as a whole), directly or indirectly, effects any sale, lease, license, assignment, transfer,
conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct
or indirect, purchase offer, tender offer or exchange offer (whether by the Issuer or another Person) is completed pursuant to which holders
of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by
the holders of more than 50% of the outstanding Common Stock, (iv) the Issuer, directly or indirectly, in one or more related transactions
effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which
the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Issuer, 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 Person whereby such other Person 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 conversion of this Note, the Holder
shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion immediately prior to the
occurrence of such Fundamental Transaction (without regard to any limitation in Section 3(d) or Section 3(e) on the conversion of this
Note), 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 Note is convertible immediately prior to such Fundamental Transaction
(without regard to any limitation in Section 3(d) or Section 3(e) on the conversion of this Note). For purposes of any such conversion,
the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount
of Alternate Consideration issuable in respect of one (1) share of Common Stock in such Fundamental Transaction, and the Issuer shall
apportion the Conversion 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 conversion of this Note following such Fundamental Transaction. |
| (f) | Calculations. All calculations under this Section 4 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 4, 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 any treasury shares of the Issuer) issued and outstanding. |
| i. | Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision
of this Section 4, the Issuer shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment. |
| ii. | Notice to Allow Conversion by Holder. If (A) the Issuer shall declare a dividend (or any other
distribution in whatever form) on the Common Stock, (B) the Issuer shall declare a special nonrecurring cash dividend on or a redemption
of the Common Stock, (C) the Issuer shall authorize the granting to all holders of the Common Stock of 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 Issuer shall be
required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Issuer(and all of its Subsidiaries,
taken as a whole) is a party, any sale or transfer of all or substantially all of the assets of the Issuer, or any compulsory share exchange
whereby the Common Stock is converted into other securities, cash or property or (E) the Issuer shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the Issuer, then, in each case, the Issuer shall cause to be filed at each office
or agency maintained for the purpose of conversion of this Note, and shall cause to be delivered to the Holder at its last address as
it shall appear upon the Note Register, at least fifteen (15) 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 convert this Note during the 15-day period commencing on the date of such notice through the
effective date of the event triggering such notice except as may otherwise be expressly set forth herein. |
Presentment, demand, protest
and notice of presentment, demand, nonpayment and protest are each hereby waived by each Issuer.
Notwithstanding anything to
the contrary, at no time shall Holder (a) be given rights that would allow it to control Issuer; (b) have access to any material nonpublic
technical information in the possession of Issuer; (c) have the right to appoint any member or observer to the board of directors of Issuer;
or (d) be involved, other than through voting of shares, in the Issuer’s substantive decisionmaking regarding (i) the use, development,
acquisition, safekeeping, or release of sensitive personal data of U.S. citizens that the Issuer 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 Issuer 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.
The Holder hereby represents
and warrants that: (a) it and its direct or indirect equityholders and their respective affiliates are not affiliates or direct or indirect
equityholders of, have no direct or indirect economic interest in, and have not directly or indirectly entered into any agreement, arrangement
or understanding (except as expressly set forth in the preceding sentence) with, any 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 Global
Partners Investment LLC (f/k/a FF Top Holding LLC), or any of their respective affiliates (each, a “Related Person”);
and (b) the transactions contemplated by or related to this Note 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 the Holder or any of its direct or indirect equityholders or any
of their respective affiliates. Notwithstanding the foregoing, nothing in this paragraph or otherwise in this Note shall prohibit the
Holder from the right to enter into any voting agreement or grant a voting proxy at any time and on any terms, with or to FF Global Partners
Investment LLC with respect to any shares of Common Stock held by the Holder.
The Holder hereby agrees that
promptly following the satisfaction of the Closing Conditions set forth in clause (a) of the definition thereof with respect to the First
Closing, the Holder will provide bank statements showing source(s) of funding with respect to the Holder’s funding obligations under
this Note with respect to the First Closing for purposes of satisfying the Closing Conditions set forth in clause (b) of the definition
thereof.
THIS NOTE 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 LAW PRINCIPLES.
Whenever possible each provision of this Note shall be interpreted in such manner as to be effective and valid under applicable law, but
in case any provision of or obligation under this Note 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. Whenever in this Note reference is made to Holder or an Issuer, such reference shall be deemed
to include, as applicable, a reference to their respective successors and assigns. The provisions of this Note shall be binding upon each
Issuer and its successors and assigns, and shall inure to the benefit of Holder and its successors and assigns.
In addition to and without
limitation of any of the foregoing, (a) the Issuer will use commercially reasonable efforts to file the Registration Statement on or prior
to July 15, 2023 and seek effectiveness of such Registration Statement and Shareholder Approval as promptly as reasonably practicable
thereafter, (b) the Holder shall have the right, upon not less than ten (10) Business Days’ prior written notice to the Issuer within
twelve (12) months from the date of this Note, to invest an additional $20,000,000 in the Issuer on terms and conditions substantially
identical to this Note, (c) the Holder shall be entitled to receive a Warrant from the Issuer to purchase 1,848,739 shares of Common Stock
at the First Closing, 1,848,739 shares of Common Stock at the Second Closing, 1,848,739 shares of Common Stock at the Third Closing, 1,848,739
shares of Common Stock at the Fourth Closing, 1,848,739 shares of Common Stock at the Fifth Closing, 1,848,739 shares of Common Stock
at the Sixth Closing, 1,848,739 shares of Common Stock at the Seventh Closing and 1,848,739 shares of Common Stock at the Eighth Closing
on the form attached as Exhibit A hereto, and (d) the Holder represents and warrants to the Issuer that the Holder (i) has or will have
at the applicable Closing immediately available funds sufficient to pay the amounts due and owing under this Note at the First Closing,
the Second Closing, the Third Closing, the Fourth Closing, the Fifth Closing, the Sixth Closing, the Seventh Closing and the Eighth Closing,
and (ii) is an “accredited investor” as defined in the Securities Act of 1933, as amended. Holder and its affiliates shall
not be permitted to directly or indirectly short or otherwise take a similar action with respect to the Issuer’s common stock, and
have not taken any such action prior to the date hereof.
[signature page
follows]
IN WITNESS WHEREOF, the undersigned
have executed this Note the day and year first written above written intending to be legally bound hereby.
|
ISSUER: |
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FARADAY FUTURE INTELLIGENT ELECTRIC INC. |
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By: |
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Name: |
Xuefeng Chen |
|
Title: |
Chief Executive Officer |
[Signature Page to Unsecured Convertible Senior
Promissory Note]
|
HOLDER: |
|
|
|
FF Vitality Ventures LLC |
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By: |
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|
Name: |
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Title: |
|
[Signature Page to Unsecured Convertible Senior
Promissory Note]
ANNEX A
NOTICE OF CONVERSION
The undersigned hereby elects
to convert principal under the Unsecured Convertible Senior Promissory Note due 2029 of Faraday Future Intelligent Electric Inc., a Delaware
corporation (the “Issuer”), into shares of common stock (the “Common Stock”), of the Issuer according
to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a person other than
the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates
and opinions as reasonably requested by the Issuer in accordance therewith. No fee will be charged to the holder for any conversion, except
for such transfer taxes, if any.
By the delivery of this Notice
of Conversion the undersigned represents and warrants to the Issuer that its ownership of the Common Stock does not exceed the amounts
specified under Section 4 of this Note, as determined in accordance with Section 13(d) of the Exchange Act.
The undersigned agrees to
comply with the prospectus delivery requirements under the applicable securities laws in connection with any transfer of the aforesaid
shares of Common Stock.
Conversion calculations:
Date to Effect Conversion:
Principal Amount of Note to be Converted:
Payment of Interest in Common Stock
__ yes __ no
If yes, $_____ of Interest Accrued on
Account of Conversion at Issue.
Number of shares of Common Stock to be issued:
Signature:
Name:
Address for Delivery of Common
Stock Certificates:
Or
DWAC Instructions:
Broker No:
Account No:
EXHIBIT A
FORM OF WARRANT
(see attached)
Exhibit 10.5
Execution Version
THIS SECURITY HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT COMPLIANCE
WITH THE REGISTRATION OR QUALIFICATION PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS THEREFROM.
THE HOLDER HEREOF SHOULD CONTACT THE RESPONSIBLE
OFFICER OF THE ISSUER AT THE ISSUER’S PRINCIPAL OFFICE, CURRENTLY 18455 SOUTH FIGUEROA STREET, LOS
ANGELES, CALIFORNIA 90248, TO OBTAIN THE INFORMATION RELATED TO THIS NOTE’S ORIGINAL ISSUE DISCOUNT CALCULATIONS. THIS LEGEND
IS INTENDED TO SATISFY THE ORIGINAL ISSUE DISCOUNT REPORTING REQUIREMENTS UNDER TREASURY REGULATIONS SECTION 1.1275-3.
Unsecured Convertible Senior Promissory Note
Up to $30,000,000 |
New York, New York |
|
June 26, 2023 |
Senyun International Ltd.
(“Holder”) hereby agrees to fund the undersigned (the “Issuer”) via wire transfer of immediately
available funds (a) $3,750,000 within five (5) Business Days after the satisfaction of the Closing Conditions or such earlier Business
Day as designated by the Holder by notice to the Issuer (the “First Closing”), (b) an additional $3,750,000 within
fifteen (15) Business Days after the First Closing (the “Second Closing”), (c) $3,750,000 within fifteen (15) Business
Days after the Second Closing (the “Third Closing”), (d) an additional $3,750,000 within fifteen (15) Business Days
after the satisfaction of the Closing Conditions (the “Fourth Closing”), (e) an additional $3,750,000 within fifteen
(15) Business Days after the Fourth Closing (the “Fifth Closing”), (f) an additional $3,750,000 within fifteen (15)
Business Days after the Fifth Closing (the “Sixth Closing”), (g) an additional $3,750,000 within fifteen (15) Business
Days after the Sixth Closing (the “Seventh Closing”), and (h) $3,750,000 within fifteen (15) Business Days after the
Seventh Closing (the “Eighth Closing”, and each of the First Closing, the Second Closing, the Third Closing, the Fourth
Closing, the Fifth Closing, the Sixth Closing, the Seventh Closing and the Eighth Closing, a “Closing”), in each case
subject to postponement or cancellation as set forth in the Securities Purchase Agreement dated as of May 8, 2023 among the Issuer and
the purchasers from time to time party thereto, as amended by that certain Amendment No. 1, dated as of June 26, 2023, by and among the
Issuer and the purchasers party thereto, that certain Joinder and Amendment Agreement, dated as of June 26, 2023, by and among the Issuer,
FF Vitality Ventures LLC and certain other parties set forth on the signature pages thereto, and that certain Second Joinder and Amendment
Agreement, dated as of June 26, 2023, by and among the Issuer, the Holder and certain other parties set forth on the signature pages thereto
(the “Purchase Agreement”); provided that, to the extent that any such Closing does not occur by the date set
forth above, the Holder shall have 5 additional Business Days to deliver such funds to the Issuer and cause such Closing to occur. The
Closing Conditions shall be required to have been satisfied for each Closing hereunder unless waived for such Closing (and only for such
Closing) by the Holder. If and to the extent that the VWAP for the Common Stock is less than $0.10 for the five (5) Trading Days ending
on a Closing date, such Closing date shall be delayed until the date that the VWAP for the Common Stock is equal to or greater than $0.10.
In consideration of the foregoing, the Issuer hereby promises to pay to the Holder at the office of the Holder at Flat/Rm 1121 11/F, Ocean
Centre Harbour City, Hong Kong, or at such other place as Holder may from time to time designate in writing to the Issuer, in lawful money
of the United States of America and in immediately available funds, the principal sum of the amount funded by the Holder at the First
Closing, the Second Closing, the Third Closing, the Fourth Closing, the Fifth Closing, the Sixth Closing, the Seventh Closing and the
Eighth Closing (up to an aggregate of $30,000,000) subject to a ten percent (10%) original issue discount and the other terms and conditions
set forth in this Unsecured Convertible Senior Promissory Note (this “Note”).
The outstanding principal
balance of the portion of the Note evidenced by this Note shall be due and payable on the date that is six (6) years after the Eighth
Closing (the “Maturity Date”), and the outstanding principal amount and accrued but unpaid interest on this Note may
be prepaid by the Issuer at any time in cash (subject to the same prepayment premium percentage for the Notes issued under the Purchase
Agreement) after providing fifteen (15) days’ prior written notice to the Holder (during which time the Holder may convert this
Note subject to the terms and conditions herein in lieu of prepayment, and upon such prepayment this Note shall be terminated).
“Beneficial Ownership
Limitation” shall have the meaning set forth in Section 3(d).
“Buy-In”
shall have the meaning set forth in Section 3(c)(v).
“Closing
Conditions” means receipt by the Issuer of (a) an effective Registration Statement with respect to the Underlying Shares for
such Closing under the Securities Purchase Agreement and (b) the Issuer shall have reserved the Required Reserve Amount (as defined in
Section 4(k) of that certain Second Joinder and Amendment Agreement, by and among the Holder and the Issuer, dated June 26, 2023 (the
“Joinder”)) of shares of Common Stock underlying the Applicable Notes (as defined in the Joinder, including any New
Senyun Notes to be issued at such applicable Closing) as required pursuant to Section 4(k) of the Joinder in full as of such Closing Date.
“Conversion”
shall have the meaning ascribed to such term in Section 3(a).
“Conversion
Date” shall have the meaning set forth in Section 3(a).
“Conversion
Price” shall have the meaning set forth in Section 3(b).
“Conversion Shares”
means, collectively, the shares of Common Stock issuable upon conversion of this Note in accordance with the terms hereof.
“Dilutive
Issuance” shall have the meaning set forth in Section 4(b).
“Dilutive
Issuance Notice” shall have the meaning set forth in Section 4(b).
“Equity Conditions”
means, each of the days during the period in question, (a) the Issuer shall have duly honored all conversions scheduled to occur or occurring
by virtue of one or more Notices of Conversion of the Holder, if any, after receipt of Issuer stockholder approval to increase the Issuer’s
authorized and uncommitted shares of Class A common stock (“Common Stock”) to authorize the entirety of the excess
of the Underlying Shares over the Reserved Shares (each as defined in the Purchase Agreement) for issuance (which approval, for the avoidance
of doubt, may be implemented by the Issuer through a reverse stock split that increases the number of authorized shares of the Issuer’s
Class A common stock) and for purposes of NASDAQ Listing Rule 5635 to the extent needed (the “Shareholder Approval”)
(and the filing of an amendment to the Issuer’s certificate of incorporation to reflect the Shareholder Approval to the extent needed)
and an effective Registration Statement for the applicable shares, (b) the Issuer shall have paid all liquidated damages and other amounts
owing to the Holder in respect of this Note, (c)(i) there is an effective Registration Statement pursuant to which the Holder is permitted
to utilize the prospectus thereunder to resell all of the shares of Common Stock issuable pursuant to this Note (and the Issuer believes,
in good faith, that such effectiveness will continue uninterrupted for the foreseeable future) or (ii) all of the Conversion Shares issuable
pursuant to this Note (and shares issuable in lieu of cash payments of interest) may be resold pursuant to Rule 144 without volume or
manner-of-sale restrictions or current public information requirements as determined by counsel to the Issuer, (d) the Common Stock is
trading on a Trading Market and all of the shares issuable pursuant to this Note are listed or quoted for trading on such Trading Market
(and the Issuer believes, in good faith, that trading of the Common Stock on a Trading Market will continue uninterrupted for the next
five (5) Trading Days), (e) there is a sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock for
the issuance of all of the shares then issuable pursuant to this Note after receipt of the Shareholder Approval (and the filing of an
amendment to the Issuer’s certificate of incorporation to reflect the Shareholder Approval to the extent needed) and an effective
Registration Statement for the applicable shares, (f) the issuance of the shares in question to the Holder would not violate the limitations
set forth in Section 3(d) and Section 3(e) herein, (g) there has been no public announcement of a pending or proposed Fundamental Transaction
that has not been consummated, (h) the applicable Holder is not in possession of any information provided by the Issuer, any of its Subsidiaries,
or any of their officers, directors, employees, agents or Affiliates, that constitutes, or may constitute, material non-public information
and (h) there shall not have occurred any Volume Failure or Price Failure as of such applicable date of determination.
“Exempt Issuance”
means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Issuer pursuant to any stock or
option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority of the members
of a committee of non-employee directors established for such purpose for services rendered to the Issuer, (b) securities upon the exercise
or exchange of or conversion of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible
into shares of Common Stock issued and outstanding on the date of the Eighth Closing, provided that such securities have not been amended
since the date of the Eighth Closing to increase the number of such securities or to decrease the exercise price, exchange price or conversion
price of such securities (other than in connection with stock splits or combinations) or to extend the term of such securities, (c) securities
issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Issuer, provided
that any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an
operating Issuer or an owner of an asset and shall provide to the Issuer additional benefits in addition to the investment of funds, but
shall not include a transaction in which the Issuer is issuing securities primarily for the purpose of raising capital or to an entity
whose primary business is investing in securities; (d) any shares of Common Stock or securities exercisable or exchangeable for or convertible
into shares of Common Stock in an aggregate amount not to exceed $50,000,000 (excluding any Notes or the Warrants issued under the Amended
and Restated Securities Purchase Agreement entered into by the Issuer on February 3, 2023, as amended from time to time, the “Secured
Purchase Agreement”) after the date hereof; provided that, with respect to this clause (d), the issuance, conversion or exercise
(as applicable) price per share at the time of issuance of such Common Stock or security (as applicable) is not less than $0.55 per share
of Common Stock (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions occurring
after the date hereof); and (e) the issuance of the Exchange Notes and Tranche A and B Notes and Warrants under the Secured Purchase Agreement
and the shares of Common Stock thereunder.
“Floor Price”
means 20% of the Minimum Price (as defined in IM-5635-1 of the Nasdaq Stock Market) as of the Trading Day ended immediately prior to the
date of the Joinder (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions
occurring thereafter).
“Fundamental
Transaction” shall have the meaning set forth in Section 4(e).
“Interest Conversion
Rate” means the greater of (x) the Floor Price and (y) 90% of the lowest VWAP for the 5 consecutive Trading Days ending on the
Trading Day that is immediately prior to the date on which interest is paid in shares of Common Stock.
“Interest
Conversion Shares” shall have the meaning set forth in Section 2(a).
“Interest
Notice Period” shall have the meaning set forth in Section 2(a).
“Interest
Payment Date” shall have the meaning set forth in Section 2(a).
“Interest
Share Amount” shall have the meaning set forth in Section 2(a).
“Issuable
Maximum” shall have the meaning set forth in Section 3(e).
“Make-Whole
Amount” shall have the meaning set forth in Section 3(c)(i).
“Note Register”
shall have the meaning set forth in Section 2(c).
“Notice
of Conversion” shall have the meaning set forth in Section 3(a).
“Price Failure”
means, with respect to a particular date of determination, the VWAP of the Common Stock on any Trading Day during the seven (7) Trading
Day period ending on the Trading Day immediately preceding such date of determination fails to exceed the Floor Price (as adjusted for
stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions occurring after the date hereof). All
such determinations to be appropriately adjusted for any stock splits, stock dividends, stock combinations, recapitalizations or other
similar transactions during any such measuring period.
“Registration Statement”
means a registration statement covering the resale of the Underlying Shares (as defined in the Purchase Agreement) by each Holder.
“Share
Delivery Date” shall have the meaning set forth in Section 3(c)(ii).
“Trading
Day” means a day on which the principal Trading Market is open for trading.
“Trading Market”
means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the
NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange (or any
successors to any of the foregoing).
“Volume Failure”
means, with respect to a particular date of determination, the average dollar trading volume (as reported on Bloomberg, LP) of the Common
Stock on the principal Trading Market of the Common Stock during the seven (7) Trading Day period ending on the Trading Day immediately
preceding such date of determination, is less than $500,000 (as adjusted for any stock splits, stock dividends, stock combinations, recapitalizations
or other similar transactions occurring after the date hereof).
“VWAP” means,
for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted
on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the
Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a
similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock
so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the
Issuer, the fees and expenses of which shall be split by the Issuer and the Purchasers.
| (a) | The Issuer shall pay interest to the Holder on the aggregate unconverted and then outstanding principal
amount of this Note (including any Make-Whole Amount payable upon conversion of this Note) at the rate of 10 % per annum, payable on each
Conversion Date and on the Maturity Date (each such date, an “Interest Payment Date”) (if any Interest Payment Date
is not a Business Day, then the applicable payment shall be due on the next succeeding Business Day), in cash or, at the Issuer’s
option, in duly authorized, validly issued, fully paid and non-assessable shares of Common Stock (the “Interest Conversion Shares”)
at the Interest Conversion Rate (the dollar amount to be paid in shares, the “Interest Share Amount”) or a combination
thereof; provided, however, that payment in shares of Common Stock may only occur if (i) all of the Equity Conditions have
been met (unless waived by the Holder in writing) on the applicable Interest Payment Date (the “Interest Notice Period”)
and through and including the date such shares of Common Stock are actually issued to the Holder, (ii) the Issuer shall have given the
Holder notice in accordance with the notice requirements set forth below (other than the Make-Whole Amount which shall require notice
from the Issuer within three (3) Trading Days of a Notice of Conversion), and (iii) as to any Interest Share Amount, the effective rate
of interest shall be calculated at 15% per annum. Notwithstanding anything to the contrary, during any periods that the Note is outstanding
and an Event of Default is occurring, the interest rate shall be 15% per annum if paid in cash only and 18% if paid in cash and stock
otherwise as set forth above. |
| (b) | Subject to the terms and conditions herein, the decision whether to pay interest hereunder in cash, shares
of Common Stock or a combination thereof shall be at the sole discretion of the Issuer. Prior to the commencement of any Interest Notice
Period, the Issuer shall deliver to the Holder a written notice of its election to pay interest hereunder on the applicable Interest Payment
Date either in cash, shares of Common Stock or a combination thereof (other than with respect to any Make-Whole Payment which election
shall be made within three (3) Trading Days of the applicable Conversion Date). During any Interest Notice Period (or after the election
is made in connection with a Make-Whole Payment), the Issuer’s election (whether specific to an Interest Payment Date or continuous)
shall be irrevocable as to such Interest Payment Date. Subject to the aforementioned conditions, failure to timely deliver such written
notice to the Holder shall be deemed an election by the Issuer to pay the interest on such Interest Payment Date in cash. |
| (c) | Interest shall be calculated on the basis of a 360-day year, consisting of twelve 30 calendar day periods,
and shall accrue daily commencing on the date of the Eighth Closing until payment in full of the outstanding principal, together with
all accrued and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made. Payment of interest
in shares of Common Stock (other than the Interest Conversion Shares issued prior to an Interest Notice Period) shall otherwise occur
pursuant to Section 3 herein and, solely for purposes of the payment of interest in shares, the Interest Payment Date shall be deemed
the Conversion Date. Interest shall cease to accrue with respect to any principal amount converted, provided that, the Issuer actually
delivers the Conversion Shares within the time period required by Section 3(c) herein. Interest hereunder will be paid to the Person in
whose name this Note is registered on the records of the Issuer regarding registration and transfers of this Note (the “Note
Register”). Except as otherwise provided herein, if at any time the Issuer pays interest partially in cash and partially in
shares of Common Stock to the holders of the Notes, then such payment of cash shall be distributed ratably among the holders of the then-outstanding
Notes based on their (or their predecessor’s) initial purchases of Notes pursuant to the Purchase Agreement. |
| (d) | All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate
equal to the lesser of 18% per annum or the maximum rate permitted by applicable law (the “Late Fees”) which shall
accrue daily from the date such interest is due hereunder through and including the date of actual payment in full. Notwithstanding anything
to the contrary contained herein, if, on any Interest Payment Date the Issuer has elected to pay accrued interest in the form of Common
Stock but the Issuer is not permitted to pay accrued interest in Common Stock because it fails to satisfy the conditions for payment in
Common Stock set forth in Section 2(a) herein, then, at the option of the Holder, the Issuer, in lieu of delivering either shares of Common
Stock pursuant to this Section 2 or paying the interest payment in cash, shall deliver, within three (3) Trading Days of each applicable
Interest Payment Date, an amount in cash equal to the product of (x) the number of shares of Common Stock otherwise deliverable to the
Holder in connection with the payment of interest due on such Interest Payment Date multiplied by (y) the highest VWAP during the period
commencing on the Interest Payment Date and ending on the Trading Day prior to the date such payment is actually made. |
| (a) | Voluntary Conversion. At any time until this Note is no longer outstanding, subject to Section
3(e), this Note shall be convertible, in whole or in part, into shares of Common Stock at the option of the Holder, at any time and from
time to time (subject to the conversion limitations set forth in Section 3(d) and Section 3(e) hereof) (each a “Conversion”).
The Holder shall effect conversions by delivering to the Issuer a Notice of Conversion, the form of which is attached hereto as Annex
A (each, a “Notice of Conversion”), specifying therein the principal amount of this Note to be converted, the Make-Whole
Amount (as defined below) and the date on which such conversion shall be effected (such date, the “Conversion Date”).
If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is
deemed delivered hereunder. No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of
guarantee or notarization) of any Notice of Conversion form be required. To effect conversions hereunder, the Holder shall not be required
to physically surrender this Note to the Issuer unless the entire principal amount of this Note, plus all accrued and unpaid interest
thereon, has been so converted in which case the Holder shall surrender this Note as promptly as is reasonably practicable after such
conversion without delaying the Issuer’s obligation to deliver the shares on the Share Delivery Date. Conversions hereunder shall
have the effect of lowering the outstanding principal amount of this Note in an amount equal to the applicable conversion. The Holder
and the Issuer shall maintain records showing the principal amount(s) converted and the date of such conversion(s). The Issuer may deliver
an objection to any Notice of Conversion within one (1) Business Day of delivery of such Notice of Conversion. The Holder, and any
assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of
a portion of this Note, the unpaid and unconverted principal amount of this Note may be less than the amount stated on the face hereof. |
| (b) | Conversion Price. The conversion price in effect on any Conversion Date shall be $0.8925 subject
to adjustment as set forth herein (the “Conversion Price”). |
| (c) | Mechanics of Conversion. |
| i. | Conversion Shares Issuable Upon Conversion of Principal Amount. The number of Conversion Shares
issuable upon a conversion hereunder shall be determined by the quotient obtained by dividing the outstanding principal amount of this
Note to be converted by the Conversion Price. Additionally, on each Conversion Date, the Issuer shall pay to the Holder, in cash, the
sum of (A) all accrued interest on this Note to date plus (B) all interest that would otherwise accrue on such principal amount of this
Note if such converted principal would be held to six (6) years from the date hereof (the amount in clause (B), (the “Make-Whole
Amount”) minus (C) 50% of the original issue discount in respect of such converted portion of this Note; provided, however,
at the election of the Issuer, such interest and Make-Whole Amount may be paid in a combination of cash and Common Stock, otherwise pursuant
to the terms of Section 2. |
| ii. | Delivery of Conversion Shares Upon Conversion. Not later than two (2) Trading Days after each Conversion
Date (the “Share Delivery Date”), the Issuer shall deliver, or cause to be delivered, to the Holder (A) the Conversion
Shares which, on or after the earlier of (i) the six month anniversary of the Eighth Closing to the extent permitted under the Securities
Act or (ii) the Effective Date, shall be free of restrictive legends and trading restrictions (other than those which may then be required
by the Purchase Agreement) representing the number of Conversion Shares being acquired upon the conversion of this Note and (B) a bank
check in the amount of accrued and unpaid interest (if the Issuer has elected or is required to pay accrued interest in cash). On or after
the earlier of (i) the six-month anniversary of the Eighth Closing to the extent permitted under the Securities Act or (ii) the Effective
Date, the Issuer shall deliver any Conversion Shares required to be delivered by the Issuer under this Section 3 electronically through
the Depository Trust Company or another established clearing corporation performing similar functions. |
| iii. | Failure to Deliver Conversion Shares. If, in the case of any Notice of Conversion, such Conversion
Shares are not delivered to or as directed by the applicable Holder by the 3rd Trading Day following the Share Delivery Date,
the Holder shall be entitled to elect by written notice to the Issuer at any time on or before its receipt of such Conversion Shares,
to rescind such Conversion, in which event the Issuer shall promptly return to the Holder any original Note delivered to the Issuer and
the Holder shall promptly return to the Issuer the Conversion Shares issued to such Holder pursuant to the rescinded Conversion Notice. |
| iv. | Obligation Absolute; Partial Liquidated Damages. The Issuer’s obligations to issue and deliver
the Conversion Shares upon conversion of this Note in accordance with the terms hereof are absolute and unconditional, irrespective of
any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of
any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination,
or any breach or alleged breach by the Holder or any other Person of any obligation to the Issuer other than the terms hereof, and irrespective
of any other circumstance (other than a violation of law) which might otherwise limit such obligation of the Issuer to the Holder in connection
with the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a waiver by the
Issuer of any such action the Issuer may have against the Holder. In the event the Holder of this Note shall elect to convert any or all
of the outstanding principal amount hereof in accordance with the terms hereof, the Issuer may not refuse conversion based on any claim
that the Holder or anyone associated or affiliated with the Holder has been engaged in any violation of any other agreement or for any
other reason (other than a violation of law), unless an injunction from a court, on notice to Holder, restraining and or enjoining conversion
of all or part of this Note shall have been sought and obtained. In the absence of such injunction, the Issuer shall issue Conversion
Shares or, if applicable, cash, upon a properly noticed conversion. If the Issuer fails for any reason to deliver to the Holder such Conversion
Shares pursuant to Section 3(c)(ii) by the 3rd Trading Day following the Share Delivery Date, the Issuer shall pay to the Holder,
in cash, as liquidated damages and not as a penalty, for each $1,000 of principal amount being converted, $5 per Trading Day for each
Trading Day after such 3rd Trading Day following the Share Delivery Date until such Conversion Shares are delivered or Holder
rescinds such conversion. |
| v. | Compensation for Buy-In on Failure to Timely Deliver Conversion Shares Upon Conversion. In addition
to any other rights available to the Holder, if the Issuer fails for any reason to deliver to the Holder such Conversion Shares by the
3rd Trading Day following the Share Delivery Date pursuant to Section 3(c)(ii), and if after such 3rd Trading Day
following the Share Delivery Date the Holder is required by its brokerage firm 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 Conversion Shares which the Holder was entitled to receive upon the conversion relating to such 3rd Trading Day following
the Share Delivery Date (a “Buy-In”), then the Issuer shall (A) pay in cash to the Holder (in addition to any other
remedies available to or elected by the Holder) the amount, if any, by which (x) the Holder’s total purchase price (including any
brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock
that the Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving
rise to such purchase obligation was executed and (B) at the option of the Holder, either reissue (if surrendered) this Note in a principal
amount equal to the principal amount of the attempted conversion (in which case such conversion shall be deemed rescinded) or deliver
to the Holder the number of shares of Common Stock that would have been issued if the Issuer had timely complied with its delivery requirements
under Section 4(c)(ii). 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 conversion of this Note with respect to which the actual sale price of the Conversion Shares (including any brokerage
commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately preceding sentence, the
Issuer shall be required to pay the Holder $1,000. The Holder shall provide the Issuer written notice indicating the amounts payable to
the Holder in respect of the Buy-In and, upon request of the Issuer, evidence of the amount of such loss. |
| vi. | Reservation of Shares Issuable Upon Conversion. The Issuer covenants that it will at all times
after receipt of the Shareholder Approval (and the filing of an amendment to the Issuer’s certificate of incorporation to reflect
the Shareholder Approval to the extent needed) keep available out of its authorized and unissued shares of Common Stock for the sole purpose
of issuance upon conversion of this Note and payment of interest on this Note, each as herein provided, free from preemptive rights or
any other actual contingent purchase rights of Persons other than the Holder (and the other holders of the Notes), not less than such
aggregate number of shares of the Common Stock as shall (subject to the terms and conditions set forth in the Purchase Agreement) be issuable
(taking into account the adjustments and restrictions of Sections 3(d) and (e)) upon the conversion of the then outstanding principal
amount of this Note and payment of interest hereunder. The Issuer covenants that all shares of Common Stock that shall be so issuable
shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable and, if the Registration Statement is then effective
under the Securities Act, shall be registered for public resale in accordance with such Registration Statement. |
| vii. | Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued
upon the conversion of this Note. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion,
the Issuer 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 Conversion Price or round up to the next whole share. |
| viii. | Transfer Taxes and Expenses. The issuance of Conversion Shares on conversion of this Note shall
be made without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or
delivery of such Conversion Shares, provided that the Issuer shall not be required to pay any tax that may be payable in respect of any
transfer involved in the issuance and delivery of any such Conversion Shares upon conversion in a name other than that of the Holder of
this Note so converted and the Issuer shall not be required to issue or deliver such Conversion Shares unless or until the Person or Persons
requesting the issuance thereof shall have paid to the Issuer the amount of such tax or shall have established to the satisfaction of
the Issuer that such tax has been paid. The Issuer shall pay all Transfer Agent fees required for same-day processing of any Notice of
Conversion and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required
for same-day electronic delivery of the Conversion Shares. |
| (d) | Holder’s Conversion Limitations. The Issuer shall not effect any conversion of this Note,
and a Holder shall not have the right to convert any portion of this Note, to the extent that after giving effect to the conversion set
forth on the applicable Notice of Conversion, 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 conversion of this Note 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 this Note beneficially
owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or unconverted
portion of any other securities of the Issuer subject to a limitation on conversion or exercise analogous to the limitation contained
herein (including, without limitation, any other Notes or the Warrants) 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 3(d), 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 3(d) applies, the determination of whether this Note is convertible (in relation to other securities owned by
the Holder together with any Affiliates and Attribution Parties) and of which principal amount of this Note is convertible shall be in
the reasonable discretion of the Holder, and the submission of a Notice of Conversion shall be deemed to be the Holder’s determination
of whether this Note may be converted (in relation to other securities owned by the Holder together with any Affiliates or Attribution
Parties) and which principal amount of this Note is convertible, in each case subject to the Beneficial Ownership Limitation, and the
Issuer 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 3(d), in determining the number of outstanding shares of Common Stock, the Holder may rely on
the number of outstanding shares of Common Stock as reflected in (A) the Issuer’s most recent periodic or annual report filed with
the Commission, as the case may be, (B) a more recent public announcement by the Issuer, or (C) a more recent written notice by the Issuer
or the Issuer’s transfer agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request
of a Holder, the Issuer shall within two (2) Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock
then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion
or exercise of securities of the Issuer, including this Note, by the Holder 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 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 conversion
of this Note. The Holder, upon notice to the Issuer, may increase or decrease the Beneficial Ownership Limitation provisions of this Section
3(d); 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 conversion of this Note held by the Holder and the Beneficial
Ownership Limitation provisions of this Section 3(d) 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 Issuer. 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 3(d)
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 holder of this Note. Holder shall not vote or control the vote of shares of Common
Stock of the Issuer in excess of 9.99% of the number of shares of Common Stock of the Issuer outstanding immediately after giving effect
to the issuance of shares of Common Stock upon conversion of this Note (the “Vote Threshold”); provided, that Issuer
acknowledges and agrees that Holder may own in excess of the Vote Threshold; provided, that Holder has irrevocably transferred to a non-affiliated
U.S. entity voting rights of all shares of Common Stock of Issuer in excess of such Vote Threshold. |
| (e) | Issuance Limitations. Notwithstanding anything herein to the contrary, to the extent needed, if
the Issuer has not obtained Shareholder Approval, then the Issuer may not issue, upon conversion of this Note, shares of Common Stock;
provided that, for the avoidance of doubt and notwithstanding the foregoing, the Issuer may issue up to 136,788,522 shares of Common
Stock (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions occurring after
the date hereof) upon conversion of this Note prior to obtaining Shareholder Approval, as long as there are sufficient authorized but
unissued and uncommitted shares. |
| (f) | Transfer Restriction. Notwithstanding anything to the contrary in this Note, the shares of Common
Stock underlying the principal amount of this Note funded at each such Closing may be directly or indirectly transferred, sold or otherwise
disposed of. For the avoidance of doubt, nothing in this Section 3(f) shall restrict the ability of the Holder to pledge shares of Common
Stock issued upon conversion of this Note. |
| Section 4. | Certain Adjustments. |
| (a) | Stock Dividends and Stock Splits. If the Issuer, at any time while this Note is outstanding: (i)
pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or
any Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Issuer upon conversion
of, or payment of interest on, the Notes), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines
(including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues, in the
event of a reclassification of shares of the Common Stock, any shares of capital stock of the Issuer, then the Conversion Price shall
be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the
Issuer) outstanding immediately before such event, and of which the denominator shall be the number of shares of Common Stock outstanding
immediately after such event. Any adjustment made pursuant to this Section 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) | Subsequent Equity Sales. If, at any time while this Note is outstanding, the Issuer or any Subsidiary,
as applicable, sells or grants any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues (or
announces any sale, grant or any option to purchase or other disposition), any Common Stock or Common Stock Equivalents entitling any
Person to acquire shares of Common Stock at an effective price per share that is lower than the then Conversion Price (such issuances,
collectively, a “Dilutive Issuance” and such effective price, the “Base Price”)) (if the holder
of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset
provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued
in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share that is lower than the
Conversion Price, such issuance shall be deemed to have occurred for less than the Conversion Price on such date of the Dilutive Issuance),
then simultaneously with the consummation (or, if earlier, the announcement) of each Dilutive Issuance the Conversion Price shall be reduced
to equal the Base Price. Notwithstanding the foregoing, no adjustment will be made under this Section 4(b) in respect of an Exempt Issuance
or an adjustment under Section 4(a). The Issuer shall notify the Holder in writing, no later than the Trading Day following the issuance
of any Common Stock or Common Stock Equivalents subject to this Section 4(b), indicating therein the applicable issuance price, or applicable
reset price, exchange price, conversion price and other pricing terms (such notice, the “Dilutive Issuance Notice”).
For purposes of clarification, whether or not the Issuer provides a Dilutive Issuance Notice pursuant to this Section 4(b), upon the occurrence
of any Dilutive Issuance, the Holder is entitled to receive a number of Conversion Shares based upon the adjusted Conversion Price on
or after the date of such Dilutive Issuance, regardless of whether the Holder accurately refers to the adjusted Conversion Price in the
Notice of Conversion. |
| (c) | Voluntary Adjustment. Subject to the rules and regulations of the principal Trading Market of the
Common Stock, the Issuer may at any time during the term of this Note, with the prior written consent of the Holder, reduce the then current
Conversion Price of this Note to any amount and for any period of time deemed appropriate by the board of directors of the Issuer. |
| (e) | Fundamental Transaction. If, at any time while this Note is outstanding, (i) the Issuer, directly
or indirectly, in one or more related transactions effects any merger or consolidation of the Issuer with or into another Person, (ii)
the Issuer (and all of its Subsidiaries, taken as a whole), directly or indirectly, effects any sale, lease, license, assignment, transfer,
conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct
or indirect, purchase offer, tender offer or exchange offer (whether by the Issuer or another Person) is completed pursuant to which holders
of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by
the holders of more than 50% of the outstanding Common Stock, (iv) the Issuer, directly or indirectly, in one or more related transactions
effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which
the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Issuer, 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 Person whereby such other Person 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 conversion of this Note, the Holder
shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion immediately prior to the
occurrence of such Fundamental Transaction (without regard to any limitation in Section 3(d) or Section 3(e) on the conversion of this
Note), 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 Note is convertible immediately prior to such Fundamental Transaction
(without regard to any limitation in Section 3(d) or Section 3(e) on the conversion of this Note). For purposes of any such conversion,
the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount
of Alternate Consideration issuable in respect of one (1) share of Common Stock in such Fundamental Transaction, and the Issuer shall
apportion the Conversion 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 conversion of this Note following such Fundamental Transaction. |
| (f) | Calculations. All calculations under this Section 4 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 4, 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 any treasury shares of the Issuer) issued and outstanding. |
| i. | Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision
of this Section 4, the Issuer shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment. |
| ii. | Notice to Allow Conversion by Holder. If (A) the Issuer shall declare a dividend (or any other
distribution in whatever form) on the Common Stock, (B) the Issuer shall declare a special nonrecurring cash dividend on or a redemption
of the Common Stock, (C) the Issuer shall authorize the granting to all holders of the Common Stock of 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 Issuer shall be
required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Issuer(and all of its Subsidiaries,
taken as a whole) is a party, any sale or transfer of all or substantially all of the assets of the Issuer, or any compulsory share exchange
whereby the Common Stock is converted into other securities, cash or property or (E) the Issuer shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the Issuer, then, in each case, the Issuer shall cause to be filed at each office
or agency maintained for the purpose of conversion of this Note, and shall cause to be delivered to the Holder at its last address as
it shall appear upon the Note Register, at least fifteen (15) 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 convert this Note during the 15-day period commencing on the date of such notice through the
effective date of the event triggering such notice except as may otherwise be expressly set forth herein. |
Presentment, demand, protest
and notice of presentment, demand, nonpayment and protest are each hereby waived by each Issuer.
Notwithstanding anything to
the contrary, at no time shall Holder (a) be given rights that would allow it to control Issuer; (b) have access to any material nonpublic
technical information in the possession of Issuer; (c) have the right to appoint any member or observer to the board of directors of Issuer;
or (d) be involved, other than through voting of shares, in the Issuer’s substantive decisionmaking regarding (i) the use, development,
acquisition, safekeeping, or release of sensitive personal data of U.S. citizens that the Issuer 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 Issuer 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.
The Holder hereby represents
and warrants that: (a) it and its direct or indirect equityholders and their respective affiliates are not affiliates or direct or indirect
equityholders of, have no direct or indirect economic interest in, and have not directly or indirectly entered into any agreement, arrangement
or understanding (except as expressly set forth in the preceding sentence) with, any 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 Global
Partners Investment LLC (f/k/a FF Top Holding LLC), or any of their respective affiliates (each, a “Related Person”);
and (b) the transactions contemplated by or related to this Note 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 the Holder or any of its direct or indirect equityholders or any
of their respective affiliates. Notwithstanding the foregoing, nothing in this paragraph or otherwise in this Note shall prohibit the
Holder from the right to enter into any voting agreement or grant a voting proxy at any time and on any terms, with or to FF Global Partners
Investment LLC with respect to any shares of Common Stock held by the Holder.
The Holder hereby agrees that
promptly following the satisfaction of the Closing Conditions set forth in clause (a) of the definition thereof with respect to the First
Closing, the Holder will provide bank statements showing source(s) of funding with respect to the Holder’s funding obligations under
this Note with respect to the First Closing for purposes of satisfying the Closing Conditions set forth in clause (b) of the definition
thereof.
THIS NOTE 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 LAW PRINCIPLES.
Whenever possible each provision of this Note shall be interpreted in such manner as to be effective and valid under applicable law, but
in case any provision of or obligation under this Note 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. Whenever in this Note reference is made to Holder or an Issuer, such reference shall be deemed
to include, as applicable, a reference to their respective successors and assigns. The provisions of this Note shall be binding upon each
Issuer and its successors and assigns, and shall inure to the benefit of Holder and its successors and assigns.
In addition to and without
limitation of any of the foregoing, (a) the Issuer will use commercially reasonable efforts to file the Registration Statement and seek
effectiveness of such Registration Statement and Shareholder Approval as promptly as reasonably practicable thereafter, (b) the Holder
shall have the right, upon not less than ten (10) Business Days’ prior written notice to the Issuer within twelve (12) months from
the date of this Note, to invest an additional $15,000,000 in the Issuer on terms and conditions substantially identical to this Note,
(c) the Holder shall be entitled to receive a Warrant from the Issuer to purchase 1,386,554 shares of Common Stock at the First Closing,
1,386,554 shares of Common Stock at the Second Closing, 1,386,554 shares of Common Stock at the Third Closing, 1,386,554 shares of Common
Stock at the Fourth Closing, 1,386,554 shares of Common Stock at the Fifth Closing, 1,386,554 shares of Common Stock at the Sixth Closing,
1,386,554 shares of Common Stock at the Seventh Closing and 1,386,554 shares of Common Stock at the Eighth Closing on the form attached
as Exhibit A hereto, and (d) the Holder represents and warrants to the Issuer that the Holder (i) has or will have at the applicable Closing
immediately available funds sufficient to pay the amounts due and owing under this Note at the First Closing, the Second Closing, the
Third Closing, the Fourth Closing, the Fifth Closing, the Sixth Closing, the Seventh Closing and the Eighth Closing, and (ii) is an “accredited
investor” as defined in the Securities Act of 1933, as amended. Holder and its affiliates shall not be permitted to directly or
indirectly short or otherwise take a similar action with respect to the Issuer’s common stock, and have not taken any such action
prior to the date hereof.
[signature page
follows]
IN WITNESS WHEREOF, the undersigned
have executed this Note the day and year first written above written intending to be legally bound hereby.
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ISSUER: |
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FARADAY FUTURE INTELLIGENT ELECTRIC INC. |
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By: |
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Name: |
Xuefeng Chen |
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Title: |
Chief Executive Officer |
[Signature Page to Unsecured Convertible Senior
Promissory Note]
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HOLDER: |
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Senyun International
Ltd. |
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By: |
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Name: |
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Title: |
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[Signature Page to Unsecured Convertible Senior
Promissory Note]
ANNEX A
NOTICE OF CONVERSION
The undersigned hereby elects
to convert principal under the Unsecured Convertible Senior Promissory Note due 2029 of Faraday Future Intelligent Electric Inc., a Delaware
corporation (the “Issuer”), into shares of common stock (the “Common Stock”), of the Issuer according
to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a person other than
the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates
and opinions as reasonably requested by the Issuer in accordance therewith. No fee will be charged to the holder for any conversion, except
for such transfer taxes, if any.
By the delivery of this Notice
of Conversion the undersigned represents and warrants to the Issuer that its ownership of the Common Stock does not exceed the amounts
specified under Section 4 of this Note, as determined in accordance with Section 13(d) of the Exchange Act.
The undersigned agrees to
comply with the prospectus delivery requirements under the applicable securities laws in connection with any transfer of the aforesaid
shares of Common Stock.
Conversion calculations:
Date to Effect Conversion:
Principal Amount of Note to be Converted:
Payment of Interest in Common Stock
__ yes __ no
If yes, $_____ of Interest Accrued on
Account of Conversion at Issue.
Number of shares of Common Stock to be issued:
Signature:
Name:
Address for Delivery of Common
Stock Certificates:
Or
DWAC Instructions:
Broker No:________________
Account No:______________
EXHIBIT A
FORM OF WARRANT
(see attached)