Form of Exchange Agreement, dated as of November 21, 2023, by and among Digital Health Acquisition Corp., VSee Lab, Inc., and iDoc Virtual Telehealth Solutions, Inc., and the Bridge Investor

EX-10.5 8 tm2331127d1_ex10-5.htm EXHIBIT 10.5

 

Exhibit 10.5

 

EXECUTION COPY

 

EXCHANGE AGREEMENT

 

This Exchange Agreement (this “Agreement”) is dated as of November 21, 2023, between Digital Health Acquisition Corp., a Delaware corporation (“DHAC”), VSee Lab, Inc., a Delaware corporation (“VSee”) and iDoc Virtual Telehealth Solutions, Inc., a Texas corporation (“iDoc”, and together with DHAC and VSee, each a “Company” and collectively, the “Companies”) and the holders identified on the signature pages hereto (each an “Initial Holder” and, including their respective successors and permitted assigns, each a “Holder” and collectively the “Holders” or “Holder Parties”), and [INVESTOR], a Connecticut limited liability company, as collateral agent for the Holder Parties (in such capacity, and together with any successor and replacement named in accordance with this Agreement, the “Collateral Agent”).

 

WHEREAS, DHAC, VSee and iDoc seek to consummate the Business Combination in accordance with the terms and conditions of the Business Combination Agreement, upon which VSee and iDoc will become wholly owned subsidiaries of DHAC and DHAC will change its name to “VSee Health, Inc.”;

 

WHEREAS, the Initial Holders, severally and not jointly, beneficially own and hold (i) a promissory note of DHAC in the principal amount (including the original issue discount of $88,888.89) of $888,888.89 (the “DHAC Note”); (ii) a promissory note of VSee in the principal amount (including the original issue discount of $66,666.67) of $666,666.67 (the “VSee Note”); and (iii) a promissory note of iDoc in the principal amount (including the original issue discount of $66,666.67) of $666,666.67 (the “iDoc Note”, together with the DHAC Note and the VSee Note, each as further detailed on Schedule I hereto, collectively, the “Original Notes”) which are currently due and owing, and have an aggregate current value of $3,723,744.29;

 

WHEREAS, pursuant to separate Securities Purchase Agreements, each dated as of the date hereof, between the Initial Holders and each of VSee and iDoc, the Initial Holders have agreed to purchase from VSee and iDoc, respectively, their respective shares of common stock, in exchange of the principal amount (excluding the original issue discount of $66,666.67) of $600,000.00 of the VSee Note and the principal amount (excluding the original issue discount of $66,666.67) of $600,000.00 of the iDoc Note, respectively, effective immediately prior to the consummation of the Business Combination;

 

WHEREAS, the Initial Holders, severally and not jointly, desire to, upon consummation of the Business Combination, exchange all amounts currently due and owing (the “Original Notes Amount”) under (i) the DHAC Note, (ii) the VSee Note other than the principal amount of $600,000.00 thereof, and (iii) the iDoc Note other than the principal amount of $600,000.00 thereof (the “Exchange”) for senior secured convertible promissory notes with an aggregate principle value of $2,523,744.29 (such notes, the “Notes” or the “Securities”), in the form of note attached hereto as Exhibit A, and DHAC desires to convey, severally and not jointly, the Notes in exchange for the Original Notes Amount, all on the terms and conditions set forth in this Agreement in reliance on the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”);

 

WHEREAS, concurrently with the consummation of the transactions contemplated hereby, DHAC and the Initial Holders shall enter into a Registration Rights Agreement, in the form attached hereto as Exhibit B (the “Registration Rights Agreement”); and

 

WHEREAS, upon the consummation of the transactions contemplated hereby and by the Securities Purchase Agreements described above, the Holders shall no longer hold the Original Notes, and the Companies shall cancel the Original Notes, and other physical documents evidencing the ownership of the Original Notes, if any, and the Original Notes shall be deemed paid in full.

 

NOW, THEREFORE, in consideration of the representations, warranties and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Companies and each Holder agree as follows:

 

 

ARTICLE I      DEFINITIONS

 

1.1            Definitions. In addition to the terms defined elsewhere in this Agreement, the following terms have the meanings set forth in this Section 1.1:

 

“Affiliate” means each Person that controls, is controlled by or is under common control with such Person or any Affiliate of such Person. For purpose of this definition, “control” and related words are used as such terms are used in and construed under Rule 405 under the Securities Act. Notwithstanding the foregoing, the Holders and their Subsidiaries, on the one hand, and the Company Parties and their Subsidiaries, on the other hand, shall not be considered “Affiliates” of each other.

 

“AML/CTF Regulation” has the meaning ascribed to such term in Section 3.1(kk).

 

“BHCA” has the meaning ascribed to such term in Section 3.1(gg).

 

“Board of Directors” means the board of directors of the applicable Company.

 

“Business Combination” means the consummation of the proposed business combination in accordance with the terms and conditions set forth in that certain Third Amended and Restated Business Combination Agreement dated as of November 21, 2023, by and among Digital Health Acquisition Corp., DHAC Merger Sub I, Inc. and DHAC Merger Sub II, Inc., VSee and iDoc (as may be amended and/or restated the “Business Combination Agreement”).

 

“Business Day” means any day except Saturdays, Sundays, any day that is a federal holiday in the United States and any day on which the Federal Reserve Bank of New York is not open for business.

 

“Capital Lease” means, as applied to any Person, any lease of, or other arrangement conveying the right to use, any property (whether real, personal or mixed) by that Person as lessee that, in conformity with GAAP, is or should be accounted for as a capital lease on the balance sheet of that Person.

 

“Capital Stock” means any share, participation or other equivalent (however designated) of the capital stock of a corporation, any equivalent ownership interest in any other Person, including partnership interests and membership interests, and any warrant, right or option to purchase or other arrangement (including through a conversion or exchange of any other property) to acquire or subscribe for any item otherwise satisfying the definition of “Capital Stock,” whether or not presently convertible, exchangeable or exercisable.

 

“Closing Date” means the Trading Day on which, or next following the day on which, all of the Transaction Documents required to be executed or delivered prior to the Closing have been executed and delivered by the applicable parties thereto and all other conditions precedent to (i) each Initial Holder’s obligations to deliver the Original Notes and (ii) DHAC’s obligations to deliver the Securities, in each case, have been satisfied or waived.

 

“Closing” means the closing of the issuance the Securities pursuant to Section 2.3.

 

“Collateral” means any and all “Collateral” as defined in the Security Agreement or any other Transaction Document granting a Lien to the Collateral Agent or any other Holder Party, as applicable, together with all property and interests in property and proceeds thereof now owned or hereafter acquired by any Company Party in or upon which a Lien is granted or purported to be granted pursuant to any Transaction Document.

 

“Commission” means the United States Securities and Exchange Commission.

 

“Common Stock” means DHAC’s common stock, par value $0.0001 per share, any Capital Stock into which such shares of common stock shall have been changed, and any share capital resulting from a reclassification of such common stock.

 

“Common Stock Equivalents” means any securities of DHAC or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

 

 

“Company Party” means each of the Companies and their Subsidiaries.

 

“Company Covered Person” has the meaning ascribed to such term in Section 3.1(ll).

 

“Consents” means any approval, consent, authorization, notice to, or any other action by, any Person other than any Governmental Authority.

 

“Contractual Obligation” means, with respect to any Person, any provision of any security or similar instrument issued by such Person or of any agreement, undertaking, contract, lease, indenture, mortgage, deed of trust or other instrument (other than a Transaction Document) to which such Person is a party or by which it or any of its property is bound or to which any of its property is subject.

 

“Conversion Price” has the meaning ascribed to such term in the Notes.

 

“Conversion Shares” has the meaning ascribed to such term in the Notes.

 

“Currency Agreement” means any foreign exchange contract, currency swap agreement, futures contract, option contract, synthetic cap or other similar agreement or arrangement. For purposes of this definition, cryptocurrencies shall be considered currencies.

 

“Derivative” means any Interest Rate Agreement, Currency Agreement, futures or forward contract, spot transaction, commodity swap, purchase or option agreement, other commodity price hedging arrangement, cap, floor or collar transaction, any credit default or total return swap, any other derivative instrument, any other similar speculative transaction and any other similar agreement or arrangement designed to alter the risks of any Person arising from fluctuations in any underlying variable, including interest rates, currency values, insurance, catastrophic losses, climatic or geological conditions or the price or value of any other derivative instrument. For the purposes of this definition, “derivative instrument” means “any derivative instrument” as defined in Statement of Financial Accounting Standards No. 133 (Accounting for Derivative Instruments and Hedging Activities) of the United States Financial Accounting Standards Board, and any defined with a term similar effect in any successor statement or any supplement to, or replacement of, any such statement.

 

“Disclosure Certificate” means the Disclosure Certificate delivered pursuant to the Security Agreement.

 

“Disclosure Schedule” means a schedule disclosing detailed information about the Company Parties and the Collateral in form and substance satisfactory to the Holders on the Closing Date, together with any update on the Collateral or any other information in such certificate required to be given and given in accordance with any Transaction Document.

 

“Disqualification Event” has the meaning ascribed to such term in Section 3.1(ll).

 

“Dollars” and the sign “$” each mean the lawful money of the United States of America.

 

“Evaluation Date” has the meaning ascribed to such term in Section 3.1(o).

 

“Event of Default” means any event constituting an “Event of Default” under and as defined in any Note.

 

“Exchange Act” means the Securities Exchange Act of 1934.

 

“Exchange Transaction” has the meaning ascribed to such term in Section 4.11(b).

 

 

“Exempt Issuance” means the issuance of (a) shares of Common Stock, options or other equity awards to employees, officers, directors, advisors or independent contractors of DHAC; provided, that such issuance is approved by a majority of the Board of Directors of DHAC or stockholders of DHAC, or as part of a bona fide equity finance round; and provided, further that such issuance shall not exceed in the aggregate the authorized share reserve set forth in the Company’s equity incentive plan adopted as of the closing of the Business Combination without the prior approval of the Holders, (b) shares of Common Stock, warrants or options to advisors or independent contractors of DHAC for compensatory purposes, (c) securities upon the exercise or exchange 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 hereof, provided that such securities have not been amended since the date hereof to increase the number of such securities or to decrease the exercise price or exchange price of such securities, (d) securities issuable pursuant to any contractual anti-dilution obligations of DHAC in effect as of the date hereof, provided that such obligations have not been materially amended since the date of hereof, (e) securities issued pursuant to acquisitions or any other strategic transactions approved by a majority of the disinterested members of DHAC’s Board of Directors; provided, that such acquisitions and other strategic transactions, including, without limitation, the Business Combination, shall not include a transaction in which DHAC is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, and (f) securities issued or issuable upon the exercise, conversion or exchange of the securities issued pursuant to the transactions contemplated to close substantially concurrently with the closing of the Business Combination as set forth on Schedule 1.1 to the Disclosure Schedule.

 

“Federal Reserve” has the meaning ascribed to such term in Section 3.1(gg).

 

“GAAP” means United States generally accepted accounting principles as in effect from time to time, applied consistently throughout the periods referenced and consistently with (a) the principles and standards set forth in the opinions and pronouncements of the Financial Accounting Standards Board or any successor entity, (b) to the extent consistent with such principles, generally accepted industry practices and (c) to the extent consistent with such principles and practices, the past practices of DHAC as reflected in its financial statements disclosed in SEC Reports.

 

“Governmental Authority” means any nation, sovereign or government, any state, province, territory or other political subdivision thereof, any municipality, any agency, authority or instrumentality thereof and any entity or authority exercising executive, legislative, taxing, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing, including any central bank stock exchange regulatory body arbitrator, public sector entity, supra-national entity (including the European Union and the European Central Bank) and any self-regulatory organization (including the National Association of Insurance Commissioners).

 

“Guaranty” means that certain Guaranty required to be delivered pursuant to Section 2.4 of this Agreement, in a form and substance satisfactory to the Holders on the Closing Date, and issued by the Company Parties (other than the Companies) for the benefit of the Collateral Agent, the Holders and the other Secured Parties.

 

“Guaranty Obligation” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of such Person with respect to any Indebtedness of another Person, if the purpose or intent of such Person in incurring the Guaranty Obligation is to provide assurance to the holder of such Indebtedness that such Indebtedness will be paid or discharged, that any agreement relating thereto will be complied with, or that any holder of such Indebtedness will be protected (in whole or in part) against loss in respect thereof, including (a) the direct or indirect guaranty, endorsement (other than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of Indebtedness of another Person and (b) any liability of such Person for Indebtedness of another Person through any agreement (contingent or otherwise) (i) to purchase, repurchase or otherwise acquire such Indebtedness or any security therefor or to provide funds for the payment or discharge of such Indebtedness (whether in the form of a loan, advance, stock purchase, capital contribution or otherwise), (ii) to maintain the solvency or any balance sheet item, level of income or financial condition of another Person, (iii) to make take-or-pay or similar payments, if required, regardless of non-performance by any other party or parties to an agreement, (iv) to purchase, sell or lease (as lessor or lessee) property, or to purchase or sell services, primarily for the purpose of enabling the debtor to make payment of such Indebtedness or to assure the holder of such Indebtedness against loss or (v) to supply funds to, or in any other manner invest in, such other Person (including to pay for property or services irrespective of whether such property is received or such services are rendered), if in the case of any agreement described under clause (b)(i), (ii), (iii), (iv) or (v) above the primary purpose or intent thereof is to provide assurance that Indebtedness of another Person will be paid or discharged, that any agreement relating thereto will be complied with or that any holder of such Indebtedness will be protected (in whole or in part) against loss in respect thereof. The amount of any Guaranty Obligation shall be equal to the amount of the Indebtedness so guaranteed or otherwise supported.

 

 

“Holder Party” has the meaning ascribed to such term in Section 4.9.

 

“Indebtedness” means, with respect to any Person, without duplication, the following: (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase price of property or services other than accounts payable and accrued liabilities incurred in respect of property or services purchased in the ordinary course of business (provided, that such accounts payable and accrued liabilities are not overdue by more than 180 days), (c) all obligations of such Person evidenced by notes, bonds, debentures or similar borrowing or securities instruments, (d) all obligations of such Person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person, (e) all obligations of such Person as lessee under Capital Leases, (f) all reimbursements and all other obligations of such Person with respect to (i) letters of credit, bank guarantees or bankers’ acceptances or (ii) surety, customs, reclamation, performance or other similar bonds, (g) all obligations of such Person secured by Liens on the assets of such Person, (h) all Guaranty Obligations of such Person, (i) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Capital Stock, Stock Equivalent (valued, in the case of redeemable preferred stock, at the greater of its voluntary liquidation preference and its involuntary liquidation preference plus accrued and unpaid dividends) or any warrants, rights or options to acquire such Capital Stock, (j) after taking into account the effect of any legally-enforceable netting Contractual Obligation of such Person, all payments that would be required to be made in respect of any Derivative in the event of a termination (including an early termination) on the date of determination and (k) all obligations of another Person of the type described in clauses (a) through (j) secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) a Lien on the assets of such Person (whether or not such Person is otherwise liable for such obligations of such other Person).

 

“Intellectual Property Rights” means, collectively, all copyrights, patents, trademarks, service marks and trade names all applications for any of the foregoing, together with: (i) all inventions, processes, production methods, proprietary information, know-how and trade secrets; (ii) all licenses or user or other agreements granted with respect to any of the foregoing, in each case whether now or hereafter owned or used; (iii) all customer lists, identification of suppliers, data, plans, blueprints, specifications, designs, drawings, recorded knowledge, surveys, engineering reports, test reports, manuals, materials standards, processing standards, performance standards, catalogs, computer and automatic machinery software and programs; (iv) all field repair data, sales data and other information relating to sales or service of products now or hereafter manufactured; (v) all accounting information and all media in which or on which any information or knowledge or data or records may be recorded or stored and all computer programs used for the compilation or printout of such information, knowledge, records or data; (vi) all applications for any of the foregoing and (vii) all causes of action, claims and warranties, in each case, now or hereafter owned or acquired in respect of any item listed above.

 

“Intellectual Property Security Agreement” means each Intellectual Property Security Agreement executed by any Company Party and delivered to DHAC in the form attached to the Security Agreement and otherwise in form and substance satisfactory to the Collateral Agent.

 

“Interest Rate Agreement” means any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedging agreement or other similar agreement or arrangement.

 

“Legend Removal Date” has the meaning ascribed to such term in Section 4.1(c).

 

 

“Liabilities” means all amounts, indebtedness, obligations, liabilities, covenants and duties of every type and description owing by any Company Party from time to time to any Holder or any other Holder Party, whether direct or indirect, joint or several, absolute or contingent, due or to become due, liquidated or unliquidated, secured or unsecured, now existing or hereafter arising and however created, acquired (regardless of whether acquired by assignment), whether or not evidenced by any note or other instrument or for the payment of money and whether arising under Contractual Obligations, Regulations or otherwise, including, without duplication, (i) the principal amount due of the Notes, (ii) all other amounts, fees, interest (including any prepayment premium), commissions, charges, costs, expenses, attorneys’ fees and disbursements, indemnities, reimbursement of amounts paid and other sums chargeable to DHAC under the Notes, this Agreement or any other Transaction Document (including attorneys’ fees) or otherwise arising under any Transaction Document and (iii) all interest on any item otherwise qualifying as a “Liability” hereunder, whether or not accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or similar proceeding, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding.

 

“License Agreement” has the meaning ascribed to such term in Section 3.1(m).

 

“Lien” means any lien (statutory or other) mortgage, pledge, hypothecation, assignment, security interest, encumbrance, charge, claim, right of first refusal, preemptive right, restriction on transfer or similar restriction or other security arrangement of any kind or nature whatsoever, including any conditional sale or other title retention agreement and any capital or financing lease having substantially the same economic effect as any of the foregoing.

 

“Lock-Up Agreements” means those certain Lock-Up Agreements between the sponsor, and any officer and director of the sponsor or DHAC, as applicable, and DHAC required to be delivered pursuant to Section 2.4 of this Agreement, each in form attached hereto as Exhibit C and otherwise in form and substance satisfactory to the Holders on the Closing Date.

 

“Losses” means all liabilities, rights, demands, covenants, duties, obligations (including indebtedness, receivables and other contractual obligations), claims, damages, Proceedings and causes of actions, settlements, judgments, damages, losses (including reductions in yield), debts, responsibilities, fines, penalties, sanctions, commissions and interest, disbursements, Taxes, interest, charges, costs, fees and expenses (including fees, charges, and disbursements of financial, legal and other advisors, consultants and professionals and, if applicable, any value-added and other taxes and charges thereon), in each case of any kind or nature, whether joint or several, whether now existing or hereafter arising and however acquired and whether or not known, asserted, direct, contingent, liquidated, due, consequential, actual, punitive or treble.

 

“Material Adverse Effect” means material adverse effect on, or change in, (a) the legality, validity or enforceability of any portion of any Transaction Document, (b) the operations, assets, business, prospects or condition (financial or otherwise) of any Company Party, (c) the ability of any Company Party to perform on a timely basis its obligations under any Transaction Document for any reason whatsoever, whether foreseen or unforeseen, including due to pandemic, acts of a Governmental Authority, interruption of transportation systems, strikes, terrorist activities, interruptions of supply chains or acts of God, or (d) the Collateral or the perfection or priority of any Liens granted to any Holder Party under any Transaction Document.

 

“Maximum Rate” has the meaning ascribed to such term in Section 6.12.

 

“OFAC” has the meaning ascribed to such term in Section 3.1(ee).

 

“Participation Maximum” has the meaning ascribed to such term in Section 4.13(a).

 

“Permit” means, with respect to any Person, any permit, filing, notice, license, approval, variance, exception, permission, concession, grant, franchise, confirmation, endorsement, waiver, certification, registration, qualification, clearance or other Contractual Obligation or arrangement with, or authorization by, to or under the authority of, any Governmental Authority or pursuant to any Regulation, or any other action by any Governmental Authority in each case whether or not having the force of law and affecting or applicable to or binding upon such Person, its Contractual Obligations or arrangements or other liabilities or any of its property or to which such Person, its Contractual Obligations or any of its property is or is purported to be subject.

 

 

“Person” means an individual, partnership, corporation, incorporated or unincorporated association, limited liability company, limited liability partnership, joint stock company, land trust, business trust or unincorporated organization, or a government or agency, department or other subdivision thereof or other entity of any kind.

 

“Pre-Notice” has the meaning ascribed to such term in Section 4.13(b).

 

“Proceeding” against a Person means an action, suit, litigation, arbitration, investigation, complaint, dispute, contest, hearing, inquiry, inquest, audit, examination or other proceeding threatened or pending against, affecting or purporting to affect such Person or its property, whether civil, criminal, administrative, investigative or appellate, in law or equity before any arbitrator or Governmental Authority.

 

“Pro Rata Portion” means, with respect to a Holder and a group of Holders as of a particular date, the ratio of (i) the original principal amount of the Notes held by such Holder (including, for the avoidance of doubt its predecessors and assignors) that remains outstanding on such date to (ii) the sum of the aggregate original principal amount of Securities purchased by all Holders (including, for the avoidance of doubt, their predecessors and assignors) in such group on or prior to such date that remain outstanding on such date.

 

“Public Information Failure” has the meaning ascribed to such term in Section 4.3(b).

 

“Public Information Failure Payments” has the meaning ascribed to such term in Section 4.3(b).

 

“Regulation” means, all international, federal, state, provincial and local laws (whether civil or common law or rule of equity and whether U.S. or non- U.S.), treaties, constitutions, statutes, codes, tariffs, rules, guidelines, regulations, writs, injunctions, orders, judgments, decrees, ordinances and administrative or judicial precedents or authorities, including, in each case whether or not having the force of law, the interpretation or administration thereof by any Governmental Authority, all policies, recommendations or guidance of any Governmental Authority and all administrative orders, directed duties, directives, requirements, requests.

 

“Related Parties” of any Person means such Person, (i) each Affiliate of such Person, (ii) each Person that, directly or indirectly, owns or controls, whether beneficially, or as a trustee, guardian or other fiduciary, 5% or more of the Capital Stock having ordinary voting power in the election of directors of such Person or such Affiliate, (iii) each of such Person’s or such Affiliate’s officers, managers, directors, joint venture partners, partners and employees (and any other Person with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title or classification as a contractor under employment Regulations), (iv) any lineal descendants, ancestors, spouse or former spouses (as part of a marital dissolution) of any of the foregoing, (v) any trust or beneficiary of a trust of which any of the foregoing are the sole trustees or for the benefit of any of the foregoing. Notwithstanding the foregoing, the Holders and their Subsidiaries, on the one hand, and the Company Parties and their Subsidiaries, on the other hand, shall not be considered “Related Parties” of each other.

 

“Required Filings” means any filing required pursuant to Section 4.2 or 4.14.

 

“Required Holders” means Holders holding more than 50% of the principal amount of the Notes then outstanding.

 

“Reserve Amount” means, as of any date, two (2x) times the maximum aggregate number of shares of Common Stock then issued or potentially issuable in the future pursuant to the Transaction Documents, including any Conversion Shares issuable upon conversion of the Notes and assuming that the Conversion Price is at all times on and after the date of determination 100% of the then Conversion Price on the Trading Day immediately prior to the date of determination, all subject to proportionate adjustment for any reverse stock split or similar reclassification of the Common Stock.

 

 

“Resignation Effective Date” has the meaning ascribed to such term in Section 5.6(a).

 

“Restricted Payment” means, for any Person, (a) any dividend, stock split or other distribution, direct or indirect (including by way of spin off, reclassification, corporate rearrangement, scheme of arrangement or similar transaction), on account of, or otherwise to the holder or holders of, any shares of any class of Capital Stock of such Person now or hereafter outstanding, (b) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of Capital Stock of such Person by such Person or any Affiliate thereof now or hereafter outstanding, and (c) any payment made to retire, or to obtain the surrender of, any Stock Equivalents now or hereafter outstanding; provided, that, for the avoidance of doubt, (i) a cashless exercise of an employee stock option in which options are cancelled to the extent needed such that the “in-the-money” value of the options (i.e. the excess of market price over exercise price) that are cancelled is utilized to pay the exercise price, and applicable taxes, shall not be a “Restricted Payment” and (ii) a distribution of rights (including rights to receive assets) or options shall constitute a “Restricted Payment”.

 

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

“Sanctioned Jurisdiction” means, at any time, a country, territory or geographical region that is subject to, the target of, or purported to be subject to, Sanctions Laws.

 

“Sanctions Laws” means all applicable Regulations concerning or relating to economic or financial sanctions, requirements or trade embargoes imposed, administered or enforced from time to time by OFAC, including the following (together with their implementing regulations, in each case, as amended from time to time): the International Security and Development Cooperation Act (ISDCA) (22 U.S.C. §23499aa-9 et seq.); the Patriot Act; and the Trading with the Enemy Act (TWEA) (50 U.S.C. §5 et seq.).

 

“Sanctioned Person” means (a) any Person that is listed in the annex to, or otherwise subject to the provisions of, Executive Order 13224 – Blocking Property and Prohibiting Transactions with Persons Who Commit and Threaten to Commit or Support Terrorism, effective September 24, 2001; (b) any Person that is named in any Sanctions Laws-related list maintained by OFAC, including the “Specially Designated National and Blocked Person” list; (c) any Person or individual located, organized or resident or determined to be resident in a Sanctioned Jurisdiction that is, or whose government is, the target of comprehensive Sanctions Laws; (d) any organization or Person directly or indirectly owned or controlled by any such Person or Persons described in the foregoing clauses (a) through (c); and (e) any Person that commits, threatens or conspires to commit or supports “terrorism”," as defined in applicable United States Regulations.

 

“SEC Reports” has the meaning ascribed to such term in Section 3.1(f).

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Security Agreement” means the Security Agreement by and among the applicable Company Parties and, and for the benefit of, and in form and substance satisfactory on the Closing Date to, the Collateral Agent.

 

“Shell Company” means an entity that fits within the definition of “shell company” under Section 12b-2 of the Exchange Act and Rule 144.

 

“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act.

 

 

“Stock Equivalents” means all securities and/or Indebtedness convertible into or exchangeable for Capital Stock or any other Stock Equivalent and all warrants, options, scrip rights, calls or commitments of any character whatsoever, and all other rights or options or other arrangements (including through a conversion or exchange of any other property) to purchase, subscribe for or acquire, any Capital Stock or any other Stock Equivalent, whether or not presently convertible, exchangeable or exercisable.

 

“Subsequent Financing” has the meaning ascribed to such term in Section 4.13.

 

“Subsequent Financing Notice” has the meaning ascribed to such term in Section 4.13(b).

 

“Subsidiary” means (a) any subsidiary of the respective Company as set forth in, or otherwise required to be set forth in, the SEC Reports, both on or after the date hereof, and (b) any Person (other than natural persons) the management of which is, directly or indirectly, controlled by, or of which an aggregate of 50% or more of the outstanding Voting Stock is, at the time, owned or controlled, directly or indirectly, by such Person or one or more Subsidiaries of such Person.

 

“Taxes” means any present or future taxes, levies, imposts, duties, fees, assessments, deductions, withholdings or other charges of whatever nature, including income, receipts, excise, property, sales, use, transfer, license, payroll, withholding, social security and franchise taxes now or hereafter imposed or levied by the United States or any other Governmental Authority and all interest, penalties, additions to tax and similar liabilities with respect thereto, but excluding, in the case of any Holder, taxes imposed on or measured by the net income or overall gross receipts of such Holder.

 

“Third Party Exchange Transfer” has the meaning ascribed to such term in Section 4.11(b).

 

“Trading Day” means a day on which the principal Trading Market for the Common Stock 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; OTC Markets or the OTC Bulletin Board (or any successors to any of the foregoing).

 

“Transaction Documents” means this Agreement, the Disclosure Schedules, the Disclosure Certificate, the Notes, the Guaranty, the Security Agreement, the Intellectual Property Security Agreements, the Registration Rights Agreement, the Lock-Up Agreements, the Transfer Agent Instruction Letters, and any other documents or agreements executed in connection with the transactions contemplated hereunder.

 

“Transfer Agent” means Continental Stock Transfer & Trust Company, the current transfer agent of DHAC, with a mailing address of One State Street Plaza, 30th Floor, New York, New York 10004 and a phone number of ###-###-####, attention: Mark Zimkind, and any successor transfer agent for DHAC.

 

“Transfer Agent Instruction Letter” means the letter from DHAC to the Transfer Agent, duly acknowledged and agreed by the Transfer Agent, which instructs the Transfer Agent to issue the Conversion Shares pursuant to the Transaction Documents, in form attached hereto as Exhibit D and otherwise in form and substance satisfactory to the Holders on the Closing Date.

 

“UCC” means the Uniform Commercial Code as from time to time in effect in the State of New York; provided, that, in the event that, by reason of mandatory provisions of any applicable Regulation, any of the attachment, perfection or priority of the Collateral Agent’s or any other Holder Party’s security interest in any Collateral is governed by the Uniform Commercial Code of a jurisdiction other than the State of New York, “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of the definitions related to or otherwise used in such provisions.

 

“Variable Rate Transaction” has the meaning ascribed to such term in Section 4.11(a).

 

 

“Voting Stock” means Capital Stock of any Person (i) having ordinary power to vote in the election of any member of the board of directors or any manager, trustee or other controlling persons of such Person (irrespective of whether, at the time, Capital Stock of any other class or classes of such entity shall have or might have voting power by reason of the happening of any contingency) and (ii) any Capital Stock of such Person convertible or exchangeable without restriction at the option of the holder thereof into Capital Stock of such Person described in clause (i) of this definition.

 

ARTICLE II      ISSUANCE

 

2.1            Section 3(a)(9). Assuming the accuracy of the representations and warranties of each of the Companies and the Holders set forth in Sections 2 and 3 of this Agreement, the parties hereto acknowledge and agree that the purpose of such representations and warranties is, among other things, to ensure that the Exchange qualifies as an exchange of securities under Section 3(a)(9) of the Securities Act.

 

2.2            Closing. Upon the terms and subject to the conditions set forth herein, at the Closing, if applicable, such Initial Holder shall surrender to the Company its Original Notes for cancellation and the Company shall deliver to such Initial Holder its Note, as set forth in Section 2.3(a), and the Company and such Initial Holder shall deliver to each other the other items set forth in Section 2.3 deliverable at the Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.3 and 2.4 for Closing, such Closing shall occur at the offices of Sullivan & Worcester LLP, 1633 Broadway, New York, NY 10019 or such other location as the parties shall mutually agree, and may by agreement be undertaken remotely by electronic exchange of Closing documentation.

 

2.3            Deliveries.

 

(a)            Deliveries to Initial Holders. On or prior to the Closing (except as noted), each Company shall deliver or cause to be delivered to each Initial Holder the following, each dated as of the Closing Date and in form and substance satisfactory to the Collateral Agent and such Initial Holder:

 

(i)            the Disclosure Certificate, duly executed by each Company;

 

(ii)            the Notes for such Holder, duly executed by DHAC with an aggregate principal amount equal to the amount set forth opposite such Holder’s name on Schedule II;

 

(iii)            the Guaranty, duly executed by the Company Parties;

 

(iv)            the Security Agreement, duly executed by the Company Parties;

 

(v)            the Intellectual Property Security Agreements, duly executed by each Company Party having Intellectual Property Rights and covering collectively all such Intellectual Property Rights (subject to de minimis exceptions made by the Collateral Agent in its sole discretion);

 

(vi)            the Registration Rights Agreement duly executed by DHAC;

 

(vii)            the Lock-Up Agreement for such Holder, duly executed by DHAC and the applicable signatory thereto;

 

(viii)            the Transfer Agent Instruction Letters, duly executed by the Transfer Agent in addition to DHAC;

 

(ix)            all Disclosure Schedules, in complete and final form;

 

(x)            a certified copy of the resolutions of the Board of Directors of each Company authorizing the execution, delivery and performance of the Transaction Documents and all related actions;

 

 

(xi)            the opinion(s) of legal counsel for DHAC as to such matters as such Holder may reasonably request, in form and substance satisfactory to such Holder and the Collateral Agent;

 

(xii)            copies of the organizational and charter documents of each Company, as amended through the Closing Date, certified by as secretary of each Company as being true, correct and complete;

 

(xiii)            a certificate of status or good standing of each Company as of a date acceptable to such Holder from the jurisdiction of such Company’s organization and any foreign jurisdictions where such Company is qualified to do business;

 

(xiv)            a certificate signed by an authorized executive officer of each Company, dated the Closing Date, to the effect that the conditions specified as follows are satisfied: (i) the representations and warranties of such Company contained in this Agreement shall be true and correct as of the date of this Agreement and as of the Closing Date as if made as of the Closing Date (except to the extent such representations and warranties by their terms speak as of an earlier date, in which case they shall be true and correct as of such date), in all material respects, and (ii) such Company shall have performed and complied in all material respects with all covenants contained in this Agreement to be performed by it prior to the Closing;

 

(xv)            a closing statement, in form and substance acceptable to such Holder, and such other opinions, statements, agreements and other documents as such Holder may require.

 

(b)            Deliveries to the Companies. On or prior to the Closing, each Holder (or, where applicable, the Collateral Agent) shall deliver or cause to be delivered to DHAC, as applicable, the following, each duly executed by such Holder (or, as the case may be, the Collateral Agent) and dated as of the Closing Date:

 

(i)            the Guaranty;

 

(ii)            the Security Agreement;

 

(iii)            the Intellectual Property Security Agreement;

 

(iv)            the Registration Rights Agreement for such Holder; and

 

(v)            such Holder’s Original Note(s).

 

2.4            Closing Conditions.

 

(a)            Conditions to the Companies’ Obligations. The obligations of the Companies pursuant to Section 2.2 in connection with the Closing are subject to the satisfaction, or waiver in accordance with this Agreement, of the following conditions on or before the Closing Date:

 

(i)            the consummation of the Business Combination;

 

(ii)            the representations and warranties of each Holder contained herein shall be true and correct as of the Closing Date (unless expressly made as of an earlier date herein in which case they shall be accurate as of such date);

 

(iii)            all obligations, covenants and agreements required to be performed by any Holder on or prior to the Closing Date (other than the obligations set forth in Section 2.2 to be performed at the Closing) shall have been performed; and

 

(iv)            the delivery by each Holder of the items such Holder is required to deliver prior to the Closing Date pursuant to Section 2.3(a)(ix).

 

 

(b)            Conditions to the Initial Holder’s Obligations. The respective obligations of each Initial Holder and the Collateral Agent pursuant to Section 2.2 in connection with the Closing are subject to the satisfaction, or waiver in accordance with this Agreement, of the following conditions on or before the Closing Date, both before and after giving effect to the Closing:

 

(i)            the consummation of the Business Combination;

 

(ii)            the representations and warranties of each Company Party contained in any Transaction Document shall be true and correct as of the Closing Date (unless expressly made as of an earlier date herein in which case they shall be accurate as of such date);

 

(iii)            all obligations, covenants and agreements required to be performed by any Company Party or any on or prior to the Closing Date pursuant to any Transaction Document (other than the obligations set forth in Section 2.2 to be performed at the Closing) shall have been performed;

 

(iv)            the delivery by each Company Party of the items such Company Party is required to deliver on or prior to the Closing Date pursuant to Section 2.3(a);

 

(v)            there shall exist no Event of Default and no event which, with the passage of time or the giving of notice, would constitute an Event of Default;

 

(vi)            there shall be no breach of any obligation, covenant or agreement of any Company Party under the Transaction Documents and no existing event which, with the passage of time or the giving of notice, would constitute such a breach;

 

(vii)            from the date hereof through the Closing Date, trading in the shares of Common Stock shall not have been suspended by the Commission or DHAC’s principal Trading Market and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of such Initial Holder, and without regard to any factors unique to such Initial Holder, makes it impracticable or inadvisable to take delivery of the Securities at the Closing;

 

(viii)            no Material Adverse Effect shall have occurred from the date hereof through the Closing Date;

 

(ix)            the Company meets the current public information requirements under Rule 144 in respect of shares of the Common Stock and any other registrable securities or other shares of Common Stock issuable under the Notes; and

 

(x)            any other conditions contained herein or the other Transaction Documents, including delivery of the items that any Company Party is required to deliver on or prior to the Closing Date pursuant to Section 2.3.

 

ARTICLE III      REPRESENTATIONS AND WARRANTIES

 

3.1            Representations and Warranties of the Company Parties. Each Company, severally and not jointly, hereby makes the following representations and warranties (and, to the extent provided in the Guaranty or the Security Agreement or any other Transaction Document, each other Company Party makes the following representations and warranties as, and to the extent applicable to, such Company Party) to each Holder as of the Closing Date as to each Company Party, each subject to the exceptions set forth in the Disclosure Schedules, which Disclosure Schedules are deemed a part hereof and qualifies any representation or otherwise made herein to the extent of the disclosure contained in the corresponding section of the Disclosure Schedules:

 

 

(a)            Subsidiaries. All of the direct and indirect Subsidiaries of each Company are set forth on the Disclosure Schedule. Each Company owns, directly or indirectly, all of the Capital Stock and Stock Equivalents of each of its Subsidiaries free and clear of any Liens, other than as set forth in the SEC Reports, and all of the issued and outstanding shares of Capital Stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.

 

(b)            Organization and Qualification. Each Company Party is a Person having the corporate form listed on the Disclosure Schedule, duly organized, validly existing and in good standing under the laws of its jurisdiction of organization listed on the Disclosure Schedule and is duly qualified or licensed to transact business in its jurisdiction of organization, the jurisdiction of its principal place of business, any other jurisdiction where the Holders have filed a UCC financing statement or a mortgage and, except where the failure to do so would not have a Material Adverse Effect, any other jurisdiction where such qualification is necessary to conduct its business or own the property it purports to own – and no Proceeding exists or has be instituted or threatened in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification. No Company Party is engaged in the business of extending credit (which shall not include intercompany credit among the Company Parties) for the purpose of purchasing or carrying margin stock or any cryptocurrency, token or other blockchain asset.

 

(c)            Authorization; Enforcement. The execution, delivery, performance by each Company Party of its obligations, and exercise by such Company Party of its rights under the Transaction Documents, including, if applicable, the sale of the Securities and other securities under this Agreement, (i) have been duly authorized by all necessary corporate actions of such Company Party, (ii) except for the Required Filings, do not require any Consents or Permits that have not been obtained prior to the date hereof and each such Permit or Consent is in full force and effect and not subject of any pending or, to the best of any Company Party’s knowledge, threatened, attack or revocation, (iii) are not and will not be in conflict with or prohibited or prevented by or create a breach under (A) except for those that do not have a Material Adverse Effect, any Regulation or Permit, (B) any corporate governance document or resolution or (C) except for those that do not have a Material Adverse Effect, any Contractual Obligation or provision thereof binding on such Company Party or affecting any property of such Company Party, and (iv) will not result in the imposition of any Lien on the Collateral other than Liens for the benefit of the Holder Parties. Upon execution and delivery thereof, each Transaction Document to which such Company Party purports to be a party shall constitute the legal, valid and binding obligation of such Company Party, enforceable against such Company Party in accordance with its terms, subject only to bankruptcy and similar Regulations affecting creditors’ rights generally.

 

(d)            Issuance of the Securities. The issuances of the Securities by DHAC are duly authorized and paid for and, upon conveyance in accordance with the terms hereof, the Securities shall be validly issued, fully paid and non-assessable. Upon issuance and conveyance in accordance herewith, the conveyance by DHAC of the Securities is exempt from the registration requirements of the Securities Act under Section 3(a)(9) of the Securities Act.

 

(e)            Capitalization. The capitalization of each Company is as set forth on the Disclosure Schedule, which Disclosure Schedule also includes the number of shares of Common Stock owned beneficially, and of record, by Affiliates of DHAC as of the date hereof. DHAC has not issued any Capital Stock or Stock Equivalent since its most recently filed periodic report under the Exchange Act except (i) as set forth on the Disclosure Schedule, (ii) for the issuance of shares of Common Stock to employees pursuant to DHAC’s employee stock purchase plans and (iii) pursuant to the conversion and/or exercise of Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act as set forth on the Disclosure Schedule. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in, or triggered by, the transactions contemplated by the Transaction Documents as set forth on the Disclosure Schedule. There are no outstanding Stock Equivalents with respect to any Common Stock, and there are no Contractual Obligations by which DHAC or any Subsidiary is or may become bound to issue additional shares of Common Stock or Stock Equivalents except as set forth on the Disclosure Schedule. The issuance of the Securities will not obligate DHAC to issue shares of Common Stock or any other securities to any Person (other than to any Holder) and will not result in a right of any holder of securities issued by any Company Party to adjust the exercise, conversion, exchange or reset price under any Stock Equivalent, except as set forth on the Disclosure Schedule. All of the outstanding shares of Capital Stock of DHAC are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all securities Regulations, and no such outstanding share was issued in violation of any preemptive right or similar or other right to subscribe for or purchase securities or any other existing Contractual Obligation. No further approval or authorization of any stockholder or DHAC’s Board of Directors, and no other Permit or Consent, is required for the issuance of the Securities. There are no stockholders’ agreements, voting agreements or other similar Contractual Obligations with respect to DHAC’s Capital Stock or Stock Equivalents to which DHAC is a party or, to the knowledge of DHAC, between or among any of DHAC’s stockholders or other equity investors.

 

 

(f)            SEC Reports; Financial Statements. DHAC has filed all reports, schedules, forms, statements and other documents required to be filed by DHAC under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the one (1) year preceding the date hereof (or such shorter period as DHAC was required by Regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”). As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The financial statements of DHAC included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Except as disclosed in footnotes to such financial statements, such financial statements have been prepared in accordance with GAAP and fairly present in all material respects the financial position of DHAC and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to customary and immaterial year-end audit adjustments.

 

(g)            Material Adverse Effects; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof or the Disclosure Schedule: (i) there has been no event that has had, or could reasonably be expected to result in, a Material Adverse Effect, (ii) no Company Party has incurred any Indebtedness or other liability (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required by GAAP to be reflected in DHAC’s financial statements and not required to be disclosed in filings made with the Commission, (iii) no Company Party has altered its fiscal year or accounting methods; (iv) no Company Party has declared or made any Restricted Payment or entered in any Contractual Obligation to do so, (v) no Company Party has issued any Capital Stock to any officer, director or other Affiliate, and (vi) there has been no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to any Company Party, their Subsidiaries or their respective businesses, properties, operations, assets or financial condition, that would be required to be disclosed by any Company Party under applicable securities Regulations at the time this representation is made or deemed made that has not been publicly disclosed at least one (1) Trading Day prior to the date that this representation is made.

 

(h)            Litigation. Except as set forth in the SEC Reports or Disclosure Schedules, there is no Proceeding against any Company Party of any Subsidiary of any Company Party or any current or former officer or director of any Company Party or any Subsidiary of any Company Party in its capacity as such which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities, (ii) involves the Commission or otherwise involves violations of securities Regulations or (iii) could, assuming an unfavorable result, have or reasonably be expected to result in a Material Adverse Effect, and none of the Company Parties, their Subsidiaries, or any director or officer of any of them, is or has been the subject of any Proceeding involving a claim of violation of or liability under securities Regulations or a claim of breach of fiduciary duty. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by DHAC or any Subsidiary under the Exchange Act or the Securities Act.

 

(i)            Labor Relations. There is no (i) no unfair labor practice at any Company Party and there is no unfair labor practice complaint pending against any Company Party or any Subsidiary of any Company Party or, to their knowledge of any Company Party, threatened against any of them before the National Labor Relations Board and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement that is so pending against any Company Party or any Subsidiary of any Company Party or to their knowledge threatened against any of them, (ii) no strike, work stoppage or other labor dispute in existence or to their knowledge threatened involving any Company Party or any Subsidiary of any Company Party, and (iii) no union representation question existing with respect to the employees of any Company Party or any Subsidiary of any Company Party, as the case may be, and no union organization activity that is taking place, except (with respect to any matter specified in clause (i), (ii) or (iii) above, either individually or in the aggregate) such as could not reasonably likely to have a Material Adverse Effect. None of the Company Parties’ or their respective Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with such Company Party or such Subsidiary, and none of the Company Parties nor any of their respective Subsidiaries is a party to a collective bargaining agreement. To the knowledge of each Company Party, the continued service to the applicable Company Party of the executive officers of such Company Party and its Subsidiaries is not, and is not expected to be, in violation of any material term of any Contractual Obligation in favor of any third party, and does not subject any Company Party or any Subsidiary of any Company Party to any Loss with respect to any of the foregoing matters.

 

 

(j)            Compliance. No Company Party and no Subsidiary thereof, except as set forth in the SEC Reports or the Disclosure Schedule or as could not have or reasonably be expected to result in a Material Adverse Effect: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by any Company Party or any Subsidiary under), nor has any Company Party or any Subsidiary thereof received notice of a claim that it is in default under or that it is in violation of, any Contractual Obligation (whether or not such default or violation has been waived); (ii) is in violation of any judgment, decree or order of any Governmental Authority; (iii) is or has been in violation of any Regulation, and to the knowledge of each Company Party, no Person has made or threatened to make any claim that such a violation exists (including relating to taxes, environmental protection, occupational health and safety, product quality and safety, employment or labor matters) or (iv) has incurred, or could reasonably be expected to incur Losses relating to compliance with Regulations (including clean-up costs under environmental Regulations), nor have any such Losses been threatened.

 

(k)            Permits. Each Company Party and its Subsidiaries possess all Permits, each issued by the appropriate Governmental Authority, that are necessary to conduct their respective businesses as described in the SEC Reports and which failure to possess could reasonably be expected to result in a Material Adverse Effect and no Company Party nor any Subsidiary thereof has received any notice of proceedings relating to the revocation or modification of any such Permit.

 

(l)            Title to Assets. Each Company Party and their Subsidiaries have good and marketable title in fee simple to all real property owned by them and good title in fee simple to all personal property owned or purported to be owned by any of them that is material to the business of any Company Party or any Subsidiary of any Company Party, in each case free and clear of all Liens except as set forth in the SEC Reports or the Disclosure Schedule and except for (i) Liens that do not materially affect the value of any such property and do not materially interfere with the use made and proposed to be made of such property by the Company Parties and their Subsidiaries and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by any Company Party or any Subsidiary of the Company Parties (and any personal property if such lease is material to the business of any Company Party or any Subsidiary of any Company Party) are held by them under valid, subsisting and enforceable leases with which the Company Parties and their Subsidiaries party thereto are in compliance.

 

(m)            Intellectual Property. Except where the failure to do so would not have a Material Adverse Effect, each Company Party and each Subsidiary of the Company Parties have, or have rights to use, all Intellectual Property Rights they purport to have or have rights to use, which, in the aggregate for all such Company Party and such Subsidiary, constitute all Intellectual Property Rights necessary or required for use in connection with the businesses of the Company Parties and their Subsidiary as presently conducted. No Company Party and no Subsidiary of any Company Party has received a notice (written or otherwise) that any of the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement, and, to the knowledge of each Company Party and its Subsidiaries, no event has occurred that permits, or would permit after notice or passage of time or both, the revocation, suspension or termination of such rights. No Company Party and no Subsidiary of any Company Party has received, since the date of the latest audited financial statements included within the SEC Reports, a written notice of a claim, nor has such a claim been threatened or could reasonably be expected to be made, and no Company Party and no Subsidiary of any Company Party otherwise has any knowledge that any slogan or other advertising device, product, process, method, substance or other Intellectual Property or goods or services bearing or using any Intellectual Property Right presently contemplated to be sold by or employed by Intellectual Property Right of any Company Party or any Subsidiary of any Company Party violate or infringe upon the rights of any Person, except as could not reasonably be expected to have a Material Adverse Effect. To the knowledge of each Company Party and its Subsidiaries, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. Each Company Party and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No Company Party and no Subsidiary of any Company Party has any Intellectual Property Right registered, or subject to pending applications, in the United States Patent and Trademark Office or any similar office or agency in the United States, any State thereof, any political subdivision thereof or in any other country, other than those set forth on the Disclosure Schedule, or has granted any licenses with respect thereto other than as set forth on the Disclosure Schedule. The Disclosure Schedule also sets forth all Contractual Obligations or other arrangements of any Company Party or any Subsidiary of any Company Party as in effect on the date hereof pursuant to which such Company Party or such Subsidiary has a license or other right to use any Intellectual Property owned by another Person and the dates of the expiration of such Contractual Obligations or other arrangements (collectively, together with such Contractual Obligations or other arrangements as may be entered into by any Company Party or any Subsidiary of any Company Party after the date hereof, the “License Agreements”). All material License Agreements and related rights are in full force and effect, no default or event of default exists with respect thereto in respect of the obligations of licensor or with respect to any royalty or other payment obligations of any Company Party or any Subsidiary of any Company Party or any obligation of any Company Party or any Subsidiary of any Company Party with respect to manufacturing standards, quality control or specifications and each such Company Party or such Subsidiary is in compliance with the terms thereof in all material respects and no owner, licensor or other party thereto has sent any notice of termination or its intention to terminate such license or rights.

 

 

(n)            Transactions with Related Parties. Except as set forth in the SEC Reports or the Disclosure Schedule, no Company Party and no Subsidiary of any Company Party is a party to any Contractual Obligation or other transaction with any Related Party that is not a Company Party or Subsidiary of a Company Party, including (a) Investments by any Company Party or any Subsidiary thereof in any such other Related Party or Indebtedness owing by or to any such other Related Party and (b) transfers, sales, leases, assignments or other acquisitions or dispositions of any asset, in each case except for (x) transactions in the ordinary course of business on a basis no less favorable to the Company Parties and their Subsidiaries as would be obtained in a comparable arm’s length transaction with a Person not a Related Party and (y) salaries and other director or employee or other staff compensation, including expense reimbursements and employee benefits, of the Company Parties and their Subsidiaries.

 

(o)            Sarbanes-Oxley; Internal Accounting Controls. DHAC and its Subsidiaries are in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all related Regulations. The Company Parties and their Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. DHAC and its Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for DHAC and its Subsidiaries and designed such disclosure controls and procedures to ensure that information required to be disclosed in the reports DHAC is required to file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. DHAC’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of DHAC and its Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”). DHAC presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of DHAC and its Subsidiaries.

 

 

(p)            Certain Fees. No brokerage or finder’s fees or commissions or similar fees are or will be payable by any Company Party or any Subsidiary of any Company Party to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. No Holder shall have any obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section 3.1(p) that may be due in connection with the transactions contemplated by the Transaction Documents.

 

(q)            Private Placement. Assuming the accuracy of each Holder’s representations and warranties set forth in Section 3.2, no registration under the Securities Act is required for the Exchange of the Securities by the Combined Company to the Holders as contemplated hereby. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market.

 

(r)            Investment Company. No Company Party and no Subsidiary of any Company Party is, or is an Affiliate of (and, immediately after receipt of payment for the Securities and before and after giving effect to the use of the proceeds thereof, none will be or be an Affiliate of), an “investment company” within the meaning of the Investment Company Act of 1940, as amended. Each Company Party and each Subsidiary of any Company Party shall conduct its business in a manner so that it will not become an “investment company” subject to registration under the Investment Company Act of 1940, as amended.

 

(s)            Registration Rights. Except as set out in the Registration Rights Agreement or the SEC Reports, no Person has any right to cause any Company Party or any Subsidiary of any Company Party to effect the registration under the Securities Act of any securities of any Company Party or any Subsidiary of any Company Party.

 

(t)            Listing and Maintenance Requirements. The shares of Common Stock are registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and DHAC has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the shares of Common Stock under the Exchange Act nor has DHAC received any notification that the Commission is contemplating terminating such registration. Except as set forth in the SEC Reports, DHAC has not, in the twelve (12) months preceding the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that DHAC is not in compliance with the listing or maintenance requirements of such Trading Market. Except as set forth in the SEC Reports, DHAC is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements. DHAC has submitted the List of Additional Shares Notification Form with the Nasdaq Capital Market with respect to the offering of its Securities. The issuance of the Conversion Shares would not exceed the maximum number of shares of Common Stock that may be issued under the Listing Rules of the Nasdaq Stock Market LLC without obtaining shareholder approval.

 

(u)            Application of Takeover Protections. DHAC and its Board of Directors (or equivalent body) have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under DHAC’s Certificate of Incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable as a result of the Holders and DHAC fulfilling their obligations or exercising their rights under the Transaction Documents, including as a result of DHAC’s issuance of the Securities and the ownership of the Securities by any Holder or any Affiliate of any Holder.

 

(v)            MNPI. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, each Company Party confirms that none of the Company Parties, their Affiliates, or agents or counsel or any other Person acting on behalf of the foregoing has provided any Holder, any Holder Party or their agents or counsel with any information that it believes constitutes or might constitute material, non-public information. DHAC understands and confirms that each Holder will rely on the foregoing representation in effecting transactions in securities of DHAC. Each Company Party acknowledges and agrees that no Holder makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2.

 

(w)            No Integrated Offering. Assuming the accuracy of each Holder’s representations and warranties set forth in Section 3.2, no Company Party, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this issuance of the Securities to be integrated with prior offerings by DHAC for purposes of (i) the Securities Act which would require the registration of any such securities under the Securities Act, or (ii) any applicable shareholder approval provisions of any Trading Market on which any of the securities of DHAC are listed or designated.

 

 

(x)            No General Solicitation. Neither DHAC nor any person acting on behalf of DHAC has offered or sold any of the Securities by any form of general solicitation or general advertising. DHAC has offered the Securities for sale only to the Holders and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.

 

(y)            Foreign Corrupt Practices. No Company Party and no Related Party of any Company Party, has done any of the following, directly or indirectly (including through agents, contractors, trustees, representatives and advisors): (i) made contributions or payments of, or reimbursement for, gifts, entertainment or other expenses, in each case that could reasonably be viewed as unlawful under U.S. or other Regulations related to foreign or domestic political activity or (ii) made payments to U.S. or other officials, judges, employees or other staff members of any Governmental Authority or other Persons viewed as government officials under any Regulation or to any foreign or domestic political parties, elected or union officials or campaigns in order to obtain, retain or direct business or obtain any improper advantage, and no part of the proceeds of the Securities will be used, directly or indirectly, to fund any such payment; (iii) failed to disclose fully any contribution or other payment made by any Company Party or any Subsidiary of any Company Party (or made by any person acting on the behalf of any of the foregoing) which could reasonably be viewed as in violation of U.S. or other Regulations; or (iv) any other activity in violation of the United States Foreign Corrupt Practices Act of 1977, as amended, or any other Regulation sanctioning or purporting to sanction bribery, corruption and other improper payments.

 

(z)            Accountants. DHAC’s accounting firm is Withum Smith + Brown, PC. To the knowledge and belief of DHAC, such accounting firm is a registered public accounting firm as required by the Exchange Act.

 

(aa)      No Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated by any Company Party to arise, between DHAC and the accountants and lawyers formerly or presently employed by DHAC and DHAC is current with respect to any fees owed to its accountants and lawyers which could affect DHAC’s ability to perform any of its obligations under any of the Transaction Documents.

 

(bb)      Acknowledgment Regarding Holders’ Acceptance of Securities. DHAC acknowledges and agrees that each Holder is acting solely in the capacity of an arm’s length holder with respect to the Transaction Documents and the transactions contemplated thereby. DHAC further acknowledges that no Holder is acting as a financial advisor or fiduciary of DHAC (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Holder, Holder Party or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Holders’ purchase of the Securities. DHAC further represents to each Holder that DHAC’s decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by DHAC and its representatives.

 

(cc)      Regulation M Compliance. No Company Party, Subsidiary of any Company Party or anyone acting on any of their behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of any Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Companies.

 

(dd)      Stock Option Plans. DHAC has not knowingly granted, and there is no and has been no Company policy or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release or other public announcement of material information regarding DHAC or its Subsidiaries or their financial results or prospects.

 

 

(ee)      Sanctions. No Company Party and no Related Party of any Company Party, directly or indirectly (including through agents, contractors, trustees, representatives or advisors) (a) is in violation of any Sanctions Law or engages in, or conspire or attempts to engage in, any transaction evading or avoiding any prohibition in any Sanction Law, (b) is a Sanctioned Person or derive revenues from investments in, or transactions with Sanctioned Persons, (c) has any assets located in Sanctioned Jurisdictions or (d) deals in, or otherwise engages in any transactions relating to, any property or interest in property blocked pursuant to any Regulation administered or enforced by the U.S. Office of Foreign Assets Control (“OFAC”). The Borrower will not use, directly or indirectly, any part of the proceeds of any Note hereunder to fund, and none of the Borrower or its Related Parties, either directly or indirectly (including through agents, contractors, trustees, representatives or advisors), are engaged in any operations involving, the financing of any investments or activities in, or any payments to, a Sanctioned Person.

 

(ff)      U.S. Real Property Holding Corporation. DHAC is not and has never been a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and DHAC shall so certify upon any Holder’s request.

 

(gg)      Bank Holding Company Act and Other Limiting Regulations. No Company Party and no Affiliate of any Company Party is subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). No Company Party and no Subsidiary or Affiliate of any Company Party owns or controls, directly or indirectly, individually or in the aggregate, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. No Company Party and no Subsidiary or Affiliate of any Company Party, either individually or in the aggregate, directly or indirectly, exercise or has the ability to exercise a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. DHAC is not an “investment company” and is not a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940. DHAC is not subject to regulation under the Public Utility Holding Company Act of 2005, the Federal Power Act, the Interstate Commerce Act or the Investment Company Act of 1940 or to any Regulation or Permit limiting DHAC’s ability to incur indebtedness for borrowed money.

 

(hh)      Promotional Stock Activities. No Company Party, no Subsidiary of any Company Party and none of their officers, directors, managers, affiliates or agents have engaged in any stock promotional activity that could give rise to a complaint, inquiry, or trading suspension by the Securities and Exchange Commission alleging (i) a violation of the anti-fraud provisions of the federal securities laws, (ii) violations of the anti-touting provisions, (iii) improper “gun-jumping; or (iv) promotion without proper disclosure of compensation.

 

(ii)            Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company Parties (i) have made or filed all United States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) have paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) have set aside on their respective books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company Parties know of no basis for any such claim.

 

(jj)      Seniority. As of the Closing Date, except for the Indebtedness set forth on the Disclosure Schedule and Indebtedness having an outstanding principal amount as of the Closing Date not exceeding $50,000, no Indebtedness or other claim against any Company Party is senior in right of payment to the Notes or the obligations due thereunder or their guaranties, whether with respect to interest or upon liquidation or dissolution, or otherwise, other than indebtedness secured by purchase money security interests (which is senior only as to underlying assets covered thereby) and capital lease obligations (which is senior only as to the property covered thereby).

 

(kk)      AML/CTF Regulations. The operations of the Company Parties and their Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970 and other applicable money laundering and counter-terrorism financing Regulations (collectively, the “AML/CTF Regulations”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving any Company Party or any Subsidiary of any Company Party with respect to any AML/CTF Regulation is pending or, to the knowledge of any Company Party or any such Subsidiary, threatened.

 

 

(ll)      Disqualification Events. With respect to the Securities to be offered and sold hereunder in reliance on Rule 506(b) of Regulation D promulgated under the Securities Act, none of DHAC, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of DHAC participating in the offering hereunder, any beneficial owner of twenty percent (20%) or more of DHAC’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as such term is defined in Rule 405 under the Securities Act) connected with DHAC in any capacity at the time of sale (as each such term is used and understood in Rule 506(d) of Regulation D under the Securities Act, each a “Company Covered Person”) is subject to any of the "Bad Actor" disqualifications described in Rule 506(d)(1)(i) to (viii) of Regulation D under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3) of Regulation D under the Securities Act. DHAC has exercised reasonable care to determine whether any Company Covered Person is subject to a Disqualification Event. DHAC has complied, to the extent applicable, with its disclosure obligations under Rule 506(e) of Regulation D promulgated under the Securities Act, and has furnished to the Holders a copy of any disclosures provided thereunder. DHAC will notify each Holder in writing, prior to the Closing Date, of (i) any Disqualification Event relating to any Company Covered Person and (ii) any event that would, with the passage of time, become a Disqualification Event relating to any Company Covered Person.

 

(mm)      No Other Covered Persons. There is no Person (other than a Company Covered Person) that has been or will be paid (directly or indirectly) remuneration for solicitation of the Holders in connection with the sale of any Securities.

 

(nn)      [Reserved].

 

(oo)            Subsidiary Rights. Each Company Party has the unrestricted right to vote, and (subject to limitations imposed by applicable law) to receive dividends and distributions on, all capital securities of its Subsidiaries as owned by any Company Party or any Subsidiary of any Company Party.

 

(pp)      Shell Company Status. DHAC has been since its inception, is presently, and will be until the consummation of the Business Combination, an issuer identified as a “Shell Company”.

 

(qq)      Full Disclosure. All of the disclosures furnished on behalf of, and all of the representations and warranties made by, any Company Party in any Transaction Document and all statements contained in the Disclosure Schedule to this Agreement or any certificate or other document furnished or to be furnished to any Holder or any Holder Party or their attorneys or advisors pursuant to any Transaction Document are true and correct in all material respects and none contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading. The press releases disseminated by the Company Parties during the twelve months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made and when made, not misleading.

 

(rr)      Acknowledgement Regarding the Exchange. Each Company Party acknowledges and agrees that the Holders are acting solely in the capacity of an arm’s length third party with respect to this Agreement and the transactions contemplated hereby. Each Company Party further acknowledges the Holders are not acting as a financial advisor or fiduciary of any Company Party (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby, and any advice given by the Holders or any of their representatives or agents in connection with this Agreement is merely incidental to the Exchange.

 

(ss)      No Commission: No Other Consideration. The Companies have not paid or given, and has not agreed to pay or give, directly or indirectly, any commission or other remuneration for soliciting the Exchange. The Notes are being conveyed exclusively for the exchange of the Original Notes Amount and no other consideration has or will be paid for the Notes.

 

 

(tt)      3(a)(9) Representation. None of the Companies has, nor has any person acting on their 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 Notes pursuant to this Agreement to be integrated with prior offerings by DHAC for purposes of the Securities Act which would prevent DHAC from delivering the Notes to the Holders pursuant to Section 3(a)(9) of the Securities Act, nor will the any Company take any action or steps that would cause the Exchange, issuance and delivery of the Notes to be integrated with other offerings to the effect that the delivery of the Notes to the Holders would be seen not to be exempt pursuant to Section 3(a)(9) of the Securities Act.

 

(uu)      No Third-Party Advisors. Other than legal counsel, none of the Companies has not engaged any third parties to assist in the solicitation with respect to the Exchange.

 

3.2            Representations and Warranties of Each Holder. Each Holder, severally and not jointly, for itself and for no other Holder, hereby represents and warrants as of the date hereof and as of the Closing Date to the Companies as follows (unless as of a specific date therein in which case they shall be accurate as of such date):

 

(a)            Organization; Authority. Such Holder is either an individual or an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by such Holder of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of such Holder. Each Transaction Document to which it is a party has been duly executed by such Holder, and when delivered by such Holder in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Holder, enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally; (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies; and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

(b)            Own Account. Such Holder understands that the Securities are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state securities law; provided, however, that by making the representations herein, such Holder does not agree to hold the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with an exemption from the registration requirements of the Securities Act and applicable state securities laws. Such Holder has no present intention of distributing any of such Securities in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities in violation of the Securities Act or any applicable state securities law (this representation and warranty not limiting such Holder’s right to sell the Securities in compliance with applicable federal and state securities laws). Such Holder is acquiring the Securities hereunder in the ordinary course of its business.

 

(c)            Holder Status.  At the time such Holder was issued or acquired the Securities, it was, and as of the date hereof it is, an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act.

 

(d)            Experience of Such Holder. Such Holder, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment. Such Holder is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.

 

(e)            General Solicitation. Such Holder is not being issued the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.

 

 

(f)            Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Holder has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Holder, executed any purchases or sales, including Short Sales, of the securities of DHAC during the period commencing as of the time that such Holder first received a term sheet (written or oral) from DHAC or any other Person representing DHAC setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding the foregoing, if such Holder is a multi-managed investment vehicle (whereby separate portfolio managers manage separate portions of such Holder’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Holder’s assets), the representation set forth above in this clause (f) shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to issue the Securities covered by this Agreement. Other than to other Persons party to this Agreement, such Holder has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction).

 

(g)            Ownership of the Original Securities. Such Holder is the legal and beneficial owner of the Original Note(s). Such Holder paid for the Original Note(s) and has continuously held the securities since its purchase. Such Holder owns the Original Note(s) outright and free and clear of any options, contracts, agreements, liens, security interests, or other encumbrances.

 

(h)            Reliance on Exemptions. Such Holder understands that the Exchange is being made in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Companies are relying in part upon the truth and accuracy of, and such Holder’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of such Holder set forth herein in order to determine the availability of such exemptions and the eligibility of such Holder to complete the Exchange and to acquire the Notes.

 

(i)            No Registration, Review of Approval. Such Holder acknowledges, understands and agrees that the Notes are being exchanged hereunder pursuant to an exchange offer exemption under Section 3(a)(9) of the Securities Act.

 

Each Company Party acknowledges and agrees that the representations and warranties of each Holder set forth in Section 3.2 shall not modify, amend or affect any Holder’s right to rely on the representations and warranties of any Company Party contained in this Agreement or in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation of the transaction contemplated hereby.

 

ARTICLE IV      OTHER AGREEMENTS OF THE PARTIES

 

4.1            Transfer Restrictions.

 

(a)            The Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities other than pursuant to an effective registration statement or Rule 144, to DHAC or to an Affiliate of a Holder or in connection with a pledge as contemplated in Section 4.1(b), DHAC may require the transferor thereof to provide to DHAC an opinion of counsel selected by the transferor and reasonably acceptable to DHAC, at DHAC’s sole expense in the form and substance of which opinion shall be reasonably satisfactory to DHAC, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights and obligations of a Holder under this Agreement.

 

 

(b)            Each Holder agrees, severally but not jointly, to the imprinting, for as long as is required by this Section 4.1, of a legend on all of the Securities in the following form:

 

[NEITHER] THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS [CONVERTIBLE][EXERCISABLE]] HAS NOT [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 A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.  THIS SECURITY [AND THE SECURITIES ISSUABLE UPON [CONVERSION] [EXERCISE] OF THIS SECURITY]] MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

DHAC acknowledges and agrees that each Holder may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or grant a security interest in some or all of its Securities to a financial institution that is an “accredited investor” as defined in Rule 501(a) under the Securities Act and who agrees to be bound by the provisions of this Agreement and, if required under the terms of such arrangement, such Holder may transfer pledged or secured Securities to the pledgees or secured parties.  Such a pledge or transfer would not be subject to approval of DHAC and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith.  Further, no notice shall be required of such pledge.  At DHAC’s expense, DHAC will execute and deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the Securities.

 

(c)            Certificates evidencing the Conversion Shares shall not contain any legend (including the legend set forth in Section 4.1(b)): (i) while a registration statement covering the resale of such security is effective under the Securities Act; (ii) following any sale of such Conversion Shares pursuant to Rule 144; (iii) if such Conversion Shares are eligible for sale under Rule 144; or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission). DHAC shall upon request of any Holder and at the sole expense of DHAC cause its counsel (or at such Holder’s option, exercised in its sole discretion, counsel selected by such Holder) to issue a legal opinion to the Transfer Agent promptly after any of the events described in (i)-(iv) in the preceding sentence if required by the Transfer Agent to effect the removal of any legend (including that described in Section 4.1(b)), with a copy to such Holder, its broker and the Collateral Agent. If all or any portion of the Notes is converted at a time when there is an effective registration statement to cover the resale of the Conversion Shares, or if such Conversion Shares may be sold under Rule 144 or if such legend is not otherwise required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission) then such Conversion Shares shall be issued free of all legends. DHAC agrees that following such time as such legend is no longer required under this Section 4.1(c), it will, no later than two (2) Trading Days following the delivery by any Holder to DHAC or the Transfer Agent of a certificate representing Conversion Shares, issued with a restrictive legend (such second (2^nd) Trading Day, the “Legend Removal Date” of such Securities of such Holder), instruct the Transfer Agent to deliver or cause to be delivered to such Holder a certificate representing such shares that is free from all restrictive and other legends. DHAC may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section 4.1. Certificates for the Conversion Shares subject to legend removal hereunder shall be transmitted by the Transfer Agent to such Holder by crediting the account of such Holder’s prime broker with the Depository Trust Company System as directed by such Holder.

 

4.2            Acknowledgment of Dilution. DHAC acknowledges that the issuance of the Securities may result in dilution of the outstanding shares of Common Stock, which dilution may be substantial under certain market conditions. DHAC further acknowledges that its obligations under the Transaction Documents, including its obligation to issue the Conversion Shares pursuant to the Transaction Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim DHAC may have against any Holder and regardless of the dilutive effect that such issuance may have on the ownership of the other stockholders of DHAC.

 

 

4.3            Furnishing of Information; Public Information.

 

(a)            DHAC covenants to maintain the registration of the shares of Common Stock under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by DHAC after the date hereof pursuant to the Exchange Act even if DHAC is not then subject to the reporting requirements of the Exchange Act.

 

(b)            At any time during the period commencing from the six (6)-month anniversary of the date hereof and ending at such time that all of the Securities have been sold or may be sold without the requirement for DHAC to be in compliance with Rule 144(c)(1) and otherwise without restriction or limitation pursuant to Rule 144, if DHAC shall fail for any reason to satisfy the current public information requirement under Rule 144(c) (a “Public Information Failure”) then, in addition to any Holder’s other available remedies, DHAC shall pay to each Holder, in cash, as partial liquidated damages and not as a penalty, by reason of any such delay in or reduction of its ability to sell its Securities, an amount in cash equal to two percent (2.0%) of the aggregate original principal amount of such Holder’s Securities on the day of a Public Information Failure and on every thirtieth (30^th) day (pro-rated for periods totaling less than thirty days) thereafter until the earlier of (a) the date such Public Information Failure is cured and (b) such time that such public information is no longer required  for such Holder to transfer any Securities pursuant to Rule 144.  The payments to which such Holder shall be entitled pursuant to this Section 4.3(b) are referred to herein as “Public Information Failure Payments.”  Public Information Failure Payments shall be paid on the earlier of (i) the last day of the calendar month during which such Public Information Failure Payments are incurred and (ii) the third (3^rd) Business Day after the event or failure giving rise to the Public Information Failure Payments is cured.  In the event DHAC fails to make Public Information Failure Payments when required by the preceding sentence, such Public Information Failure Payments shall bear interest at the rate of 2.0% per month (accruing and due daily and prorated for partial months) until paid in full. Nothing herein shall limit each Holder’s right to pursue actual damages for the Public Information Failure, and each Holder shall have the right to pursue all remedies available to it at law or in equity including a decree of specific performance and/or injunctive relief and recovery of loss profits.

 

4.4            Integration.  DHAC shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration under the Securities Act of the sale of the Securities or that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.

 

4.5            Conversion Procedures. The form of “Notice of Conversion” (each a “Notice of Conversion”) included in any Note, of any Holder sets forth the totality of the procedures required of such Holder in order to convert such Note. Without limiting the preceding sentences, no ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required in order to convert any Note. DHAC shall honor conversions of any Note, and shall deliver the shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents.

 

4.6            Shareholder Rights Plan. No claim will be made or enforced by DHAC or, with the consent of DHAC, any other Person, that any Holder is an “acquiring person” (or similar or equivalent term) under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by DHAC, or that any Holder could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents or under any other agreement between DHAC and any Holder.

 

4.7            Material Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, each Company Party covenants and agrees that neither it, nor any of its Affiliates, nor any other Person acting on its behalf, will provide any Holder, any Holder Party or their respective agents or counsel with any information that any Company Party believes constitutes material non-public information, unless prior thereto such information is disclosed to the public, or such Holder shall have entered into a written agreement with DHAC regarding the confidentiality and use of such information. There has been no public announcement of a pending or proposed Fundamental Transaction or Change of Control Transaction (as each such term is defined in the Notes) that has not been consummated. No Holder has been provided by any Company Party or any Related Party of any Company Party any information, that constitutes, or may constitute, material non-public information with respect to any Company Party. DHAC understands and confirms that each Holder shall be relying on the foregoing representations, warranties and covenants.

 

 

4.8            Use of Proceeds. DHAC shall use the net proceeds for payment of the expenses incurred in connection with the Business Combination.

 

4.9            Indemnification of Each Holder Party. Each Company Party shall, jointly and severally, indemnify against, and hold harmless from, each Holder, the Collateral Agent, their Related Parties, each Person who controls any of them (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and their agents, contractors, trustees, representatives and advisors (each, a “Holder Party”) any and all Losses that any Holder Party may suffer or incur as a result of or relating to (a) the administration, performance or enforcement by the Holders of any of the Transaction Documents or consummation of any transaction described therein, (b) the existence of, perfection of, a Lien upon or the sale or collection of, or any other damage, Loss, failure to return or other realization upon any collateral, (c) the failure of any Company Party or any of their Related Parties (whether directly or through their agents, contractors, trustees, representatives and advisors) to observe, perform or discharge any of the covenants or duties under any of the Transaction Documents, (d) any Proceeding, whether or not any Holder Party is a party thereto (including Proceedings instituted by any Governmental Authority or any holder of any equity interest in, or other direct or indirect investor in, any Company who is not an Affiliate of such Holder Party) with respect to any of the Transaction Documents or the transactions contemplated therein. Additionally, if any Taxes (excluding Taxes imposed upon or measured solely by the net income of the recipient of any payment made under any Transaction Document, but including any intangibles tax, stamp tax, recording tax or franchise tax) shall be imposed on any Company Party or Holder Party, whether or not lawfully payable, on account of the execution or delivery of this Agreement, or the execution, delivery, issuance or recording of any of the other Transaction Documents, or the creation or repayment of any of obligations hereunder, by reason of any applicable Regulations now or hereafter in effect, each Company shall, jointly and severally, pay (or shall promptly reimburse such Holder Party for the payment of) all such Taxes, including any interest, penalties, expenses and other Losses with respect thereto), and will indemnify and hold the Holder Parties harmless from and against all Losses arising therefrom or in connection therewith. The foregoing indemnities shall not apply to Losses incurred by any Holder Party as a result of its own gross negligence or willful misconduct as determined by a final non-appealable order of a court of competent jurisdiction. Notwithstanding anything to the contrary in any Transaction Document, the obligations of the Company Parties with respect to each indemnity given by them in this Agreement or any of the other Transaction Documents in favor of the Holder Parties shall survive the payment in full of the Notes and the termination of this Agreement. The indemnification required by this Section 4.9 shall be made only upon a final non-appealable order of a court of competent jurisdiction. The indemnification contained herein shall be in addition to any cause of action or similar right of any Holder Party against any Company Party or others and any liabilities any Company Party may be subject to pursuant to any Regulation.

 

4.10            Reservation and Listing of Securities.

 

(a)            DHAC shall maintain a reserve equal to the Reserve Amount of shares from its duly authorized shares of Common Stock for issuance pursuant to the Transaction Documents in such amount as may then be required to fulfill its obligations in full under the Transaction Documents. Upon a reverse stock split or increase in the authorized shares of Common Stock of DHAC, DHAC will immediately instruct the Transfer Agent to reserve at least the Reserve Amount after giving effect to such stock split or increase. This reserve amount shall be updated monthly.

 

(b)            If, on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than 100% of the Reserve Amount on such date, then DHAC’s Board of Directors shall amend DHAC’s Certificate of Incorporation (or equivalent governing document) to increase the number of authorized but unissued shares of Common Stock to 100% of the Reserve Amount at such time, as soon as possible and in any event not later than the 75th day after such date.

 

 

(c)            DHAC shall, if applicable: (i) in the time and manner required by the principal Trading Market, prepare and file with such Trading Market an additional shares listing application covering a number of shares of Common Stock at least equal to the Reserve Amount on the date of such application; (ii) take all steps necessary to cause such shares of Common Stock to be approved for listing or quotation on such Trading Market as soon as possible thereafter; (iii) provide to each Holder evidence of such listing or quotation; and (iv) maintain the listing or quotation of such shares Common Stock on any date at least equal to the Reserve Amount on such date on such Trading Market or another Trading Market.

 

4.11            Subsequent Equity Sales.

 

(a)            For so long as more than two-thirds of the original aggregate principal amount of the Notes remain outstanding, no Company Party, except as permitted by the Notes, shall effect or enter into an agreement to effect any issuance by any Company Party or any Subsidiary of any Company Party of Common Stock or Stock Equivalents (or a combination of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction” means a transaction in which a Person (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional shares of Common Stock either (A) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the Common Stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of such Person or the market for the ordinary or (ii) enters into any agreement, including an equity line of credit, whereby such Person may issue securities at a future determined price; provided, that a Variable Rate Transaction shall not include the transactions set forth on Schedule 1.1 to the Disclosure Schedule.

 

(b)            For as long as any Note remains outstanding, no Company Party, no Related Party of any Company Party will, directly or indirectly (including through agents, contractors, trustees, representatives or advisors): (a) solicit, initiate, encourage or accept any other inquiries, proposals or offers from any Person relating to any exchange (i) of any security of any Company Party for any other security of any Company Party, except to the extent consummated pursuant to the terms of Stock Equivalents of DHAC as in effect as of the date hereof and disclosed in filings with the Commission prior to the date hereof (without giving effect to any amendment, modification, change or waiver of any terms thereof occurring on or after the date hereof or not disclosed in a filing by DHAC with the Commission prior to the date hereof) or (ii) of any indebtedness or other securities of, or claim against, any Company Party pursuant to a registration statement files with the Commission or relying on any exemption under the Securities Act (including Section 3(a)(10) of the Securities Act (any such transaction described in clauses (i) or (ii), an “Exchange Transaction”); (b) enter into, effect, alter, amend, announce or recommend to its stockholders any Exchange Transaction with any Person; or (c) participate in any discussions, conversations, negotiations or other communications with any Person regarding any Exchange Transaction, or furnish to any Person any information with respect to any Exchange Transaction, or otherwise cooperate in any way, assist or participate in, facilitate or encourage, any effort or attempt by any Person to seek an Exchange Transaction involving any Company Party. For as long as any Note remains outstanding, no Company Party and no Related Party of any Company Party, will, either directly or indirectly (including through agents, contractors, trustees, representatives or advisors), cooperate in any way, assist or participate in, facilitate or encourage any effort or attempt by any Person to effect any acquisition of securities or indebtedness of, or claim against, DHAC by such Person from an existing holder of such securities, indebtedness or claim in connection with a proposed exchange of such securities or indebtedness of, or claim against, DHAC (whether pursuant to Section 3(a)(9) or 3(a)(10) of the Securities Act or otherwise) (a “Third Party Exchange Transfer”). The Company Parties and each of their Related Parties shall immediately cease and cause to be terminated all existing discussions, conversations, negotiations and other communications with any Persons with respect to any of the foregoing. For all purposes of this Agreement, violations of the restrictions set forth in this Section 4.11 by any Company Party, or any Subsidiary or Affiliate of any Company Party, or any officer, employee, director, agent or other representative of any Company Party or any Subsidiary or Affiliates of any Company Party shall be deemed a direct breach of this Section 4.11 by DHAC. For the avoidance of doubt, the transactions set forth on Schedule 1.1 to the Disclosure Schedule shall not be deemed violations of this Section 4.11.

 

(c)            From the date hereof until ninety (90) calendar days after the Closing Date, except as contemplated by the transactions set forth on Schedule 1.1 to the Disclosure Schedule, no Company Party shall, directly or indirectly, issue, offer, sell, grant any option or right to purchase, or otherwise dispose of (or announce any issuance, offer, sale, grant of any option or right to purchase or other disposition of) any equity security or any equity-linked or related security (including any “equity security” (as that term is defined under Rule 405 promulgated under the Securities Act), any Common Stock or Stock Equivalents, any debt securities, any preferred stock or any purchase rights) or otherwise amend, modify, waiver or alter any terms of conditions of any Stock Equivalents outstanding as of the date hereof to decrease the exercise, conversion and/or exchange price, as applicable, thereunder or otherwise increase the aggregate number of shares of Common Stock issuable in connection therewith.

 

 

(d)            Each Holder shall, severally and not jointly, be entitled to obtain injunctive relief against any Company Party to preclude any such issuance, which remedy shall be in addition to any right to collect damages. Notwithstanding the foregoing, this Section 4.11 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction shall be an Exempt Issuance.

 

(e)            For so long as any Note remains outstanding, if DHAC has, on or prior to the date of this Agreement, entered into, or shall in the future enter into, any agreement with any purchaser or holder of any securities of DHAC, by providing such purchaser or holder with any terms that are more favorable than the terms available to the Holders and set out in the Transaction Documents as of the date hereof, DHAC shall notify each Holder of such terms in writing on or before the date that is 5 Trading Days after the date such agreement with such purchaser or holder is executed or agreed to by DHAC, and each Holder shall have the right to elect in writing within thirty (30) days of the receipt of such notice to elect to have such terms apply to such Transaction Documents.

 

4.12            Acknowledgment Regarding Holders’ Other Trading Activities. Anything in this Agreement or elsewhere herein to the contrary notwithstanding (except for this Section 4.12), it is understood and acknowledged by DHAC that (i) no Holder has been asked by DHAC to agree, nor has any Holder agreed, to desist from purchasing or selling Securities of DHAC or from entering into Short Sales or Derivatives based on securities issued by DHAC or to hold the Securities for any specified term, (ii) past or future open market or other transactions by any Holder, specifically including Short Sales or Derivatives, before or after the Closing or the closing of any future private placement transactions, may negatively impact the market price of DHAC’s publicly-traded securities, (iii) each Holder, and counter-parties in Derivatives to which any Holder is a party, directly or indirectly, may presently have a “short” position in the Common Stock and (iv) no Holder shall be deemed to have any affiliation with or control over any arm’s length counter-party in any Derivative. DHAC further understands and acknowledges that (y) each Holder may engage in hedging activities at various times during the period that the Securities are outstanding, and (z) such hedging activities (if any) could reduce the value of the existing stockholders' equity interests in DHAC at and after the time that the hedging activities are being conducted. DHAC acknowledges that such aforementioned hedging activities and Derivatives do not constitute a breach of any of the Transaction Documents.

 

4.13            Right of First Refusal.

 

(a)            For a period of three (3) years commencing on the Closing Date, upon any issuance by DHAC (or any of its Subsidiaries) of Common Stock, Stock Equivalents or other Indebtedness or other securities, whether for cash consideration or a combination of units thereof (excluding an equity line of credit) (a “Subsequent Financing”), each Holder shall have the right to participate up to its Pro Rata Portion (measured against all Holders) of a percentage of such Subsequent Financing equal to, in the aggregate for all Holders, 35% (the “Participation Maximum”), on the same terms, conditions and price provided for in the Subsequent Financing.

 

(b)            At least one (1) Trading Day (four (4) hours in case of a Subsequent Financing structured as a public offering or as an “overnight” deal or other similar transaction) prior to the closing of a Subsequent Financing, DHAC shall deliver to each Holder a written notice of its intention to effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask such Holder if it wants to review the details of such financing (each additional notice containing such details, a “Subsequent Financing Notice”). Upon the request of any Holder for a Subsequent Financing Notice, and only upon such a request, DHAC shall promptly, but no later than one (1) Trading Day after such request, deliver a Subsequent Financing Notice to such Holder. The Subsequent Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended to be raised thereunder and the Persons through or with whom such Subsequent Financing is proposed to be effected, the Pro Rata Portion (as defined below) of the Participation Maximum of such Holder, an inquiry as to whether such Holder is willing to participate above their Pro Rata Portion (and what is the maximum amount such Holder is willing to commit), and shall include a term sheet or similar document relating thereto as an attachment.

 

 

(c)            If any Holder desires to participate in such Subsequent Financing, such Holder must provide written notice to DHAC within one (1) Trading Day of receipt of the Subsequent Financing Notice (four (4) hours in the event of a Subsequent Financing structured as a public offering or as an “overnight” deal or other similar transaction) that such Holder is willing to participate in the Subsequent Financing, the maximum amount for which such Holder would be willing to participate if it is allocated to it (up to the Participation Maximum), and representing and warranting that the Holder has such funds ready, willing, and available for investment on the terms set forth in the Subsequent Financing Notice.

 

(d)            At first, each Holder shall first have the right to purchase its Pro Rata Portion (measured against all Holders) of the Participation Maximum. If some Holders have declined to participate in such Subsequent Financing, and some portion of the Participation Maximum remains unallocated, each Holder having agreed to participate above its current allocation shall be allocated its Pro Rata Portion (measured against all Holder having so agreed) of the next dollar – and so on and so forth until the Participation Maximum shall be fully allocated or all Holders shall have been given their desired allocation in full.

 

(e)            The transaction documents related to any Subsequent Financing applicable to any Holder participating in such Subsequent Financing shall not include any term or provision whereby such Holder shall be required to agree to any restrictions on trading as to any of the Securities purchased hereunder. In addition, the transaction documents related to the Subsequent Financing shall not include any requirement to consent to any amendment to or termination of, or grant any waiver, release or other modification or the like under or in connection with, this Agreement, without the prior written consent of the number of Holders required hereunder to consent to this amendment, termination, waiver, consent, release or other modification.

 

(f)            Notwithstanding anything to the contrary in this Section 4.13 and unless otherwise agreed to by the applicable Holder, DHAC shall either confirm in writing to each Holder that the transaction with respect to the Subsequent Financing has been abandoned or shall publicly disclose its intention to issue the securities in the Subsequent Financing, in either case in such a manner such that each Holder will not be in possession of any material, non-public information, by the fifth (5^h) Trading Day following delivery of the Subsequent Financing Notice. If by such fifth (5^th) Trading Day, no public disclosure regarding a transaction with respect to the Subsequent Financing has been made, and no notice regarding the abandonment of such transaction has been received by the Holder, such transaction shall be deemed to have been abandoned and the Holder shall not be deemed to be in possession of any material, non-public information with respect to DHAC or any of its Subsidiaries.

 

(g)            Notwithstanding the foregoing, this Section 4.13 shall not apply in respect of an Exempt Issuance.

 

4.14            Securities Laws Disclosure; Publicity.

 

(a)            8-K Filing. DHAC shall file a Current Report on Form 8-K, including the Transaction Documents as exhibits thereto, with the Commission within the time required by the Exchange Act in connection with the transactions contemplated by the Transaction Documents. DHAC represents to each Holder that, from and after the issuance of such Current Report on Form 8-K, it shall have publicly disclosed all material, non-public information delivered to any Holder or their Related Parties (including to their agents, contractors, trustees, representatives and advisors) by any Company Party (including through agents, contractors, trustees, representatives and advisors) in connection with the transactions contemplated by the Transaction Documents.

 

(b)            Financing Statements and Other Periodic Filings. DHAC shall timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by DHAC after the date hereof pursuant to the Exchange Act and DHAC shall meet the current public information requirements of Rule 144(c) under the Securities Act as of the end of the period in question.

 

(c)            Other Public Disclosures. DHAC and the Holders shall consult with each other in issuing any other public disclosure with respect to the transactions contemplated hereby, and none of the Company Parties or any Holder shall issue any such public disclosure nor otherwise make any such public statement without the prior consent of DHAC, with respect to any press release of any Holder, or without the prior consent of the Required Holders, with respect to any press release of DHAC, which consent shall not unreasonably be withheld or delayed, except if such disclosure is reasonably viewed as required by any Regulation, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding the foregoing, DHAC shall not publicly disclose the name, trademark, service mark, symbol, logo (or any abbreviation, contraction or simulation thereof) of, or otherwise refer to, any Holder (including in any filing with the Commission, regulatory agency or Trading Market, including the 8-K filing referenced above) without the prior consent of the Holders (including in any press release, letterhead, public announcement or marketing material), except, and then only after consulting with such Holder, to the extent required to do so under applicable Regulations (including as required in any registration statement filed with the Commission). None of the Company Parties and their Affiliates shall represent that any Company Party or any of its Affiliates, any product or service of the Company Parties or their Affiliates, or any know how or policy or practice of the Company Parties or their Affiliates has been approved or endorsed by any Holder Party.

 

 

(d)            Credit Report and Other Authorizations. Each Company Party authorizes the Holder Parties, their agents and representatives and any credit reporting agency engaged by any Holder Party, to (i) investigate any references given or any other statements or data obtained from or about the Company Parties for the purpose of the Transaction Documents, (ii) obtain consumer business credit reports on the Company Parties, (iii) contact personal and business references provided by any Company Parties, at any time now or for so long as any amounts remains unpaid under the Transaction Documents, and (iv) share information regarding the Company Parties’ performance under this Agreement with affiliates and unaffiliated third parties.

 

4.15            Form D; Blue Sky Filings. DHAC agrees to timely file a Form D with respect to the Securities as required under Regulation D under the Securities Act and to provide a copy thereof, promptly upon request of any Holder. DHAC shall take such action as DHAC shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Holders at the Closing under applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions promptly upon request of any Holder.

 

4.16            Common Stock.

 

(a)            DWAC. DHAC shall ensure that its Common Stock is and remains eligible for the “Deposit and Withdrawal at Custodian” (DWAC) service of the Deposit Trust Corporation and not subject to any restriction or limitation imposed by or on behalf of the Deposit Trust Corporation on any of its services or any other restriction or limitation on the use of the services provided by the Deposit Trust Corporation (DTC chill).

 

(b)            Freely Tradeable. The Company shall ensure that the Conversion Shares constitute “freely tradeable” shares. For the purposes of this Section 4.16(b), such shares shall be deemed “freely tradeable” if such shares are eligible for resale pursuant to (i) Rule 144 (provided the Company is compliant with its current public information requirements) promulgated by the Commission pursuant to the Securities Act or such shares are the subject of a then effective registration statement or (ii) an effective “shelf” or resale registration statement under the Securities Act, in customary form, is effective under the Securities Act, registering the resale of such Conversion Shares by such Holder and names such Holder as a selling security holder thereunder, and such registration statement is reasonably acceptable such Holder

 

(c)            Trading Markets. The shares of Common Stock are trading, and DHAC believes in good faith that they shall continue to trade uninterrupted, on any Trading Market (subject to any volume restrictions set forth in the Notes). All of the shares issuable pursuant to the Transaction Documents (including the Conversion Shares) are listed or quoted for trading, and DHAC shall use its best efforts to ensure that such shares continue to be listed or quoted for trading interrupted, on any Trading Market.

 

ARTICLE V      COLLATERAL AGENT

 

5.1            Appointment. Each Holder hereby irrevocably appoints [INVESTOR], to act on its behalf as the Collateral Agent hereunder and under the other Transaction Documents and authorizes the Collateral Agent to take such actions on its behalf and to exercise such powers as are delegated to the Collateral Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this ARTICLE V are solely for the benefit of the Collateral Agent and the Holders, and no Company Party will have any rights as a third-party beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other Transaction Documents (or any other similar term) with reference to the Collateral Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any Applicable Law. Instead, such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.

 

 

5.2            Rights as a Holder. The Person serving as the Collateral Agent hereunder has the same rights and powers in its capacity as an Initial Holder and Holder as any other Initial Holder and Holder and may exercise the same as though it were not the Collateral Agent, and the terms “Initial Holder”, “Initial Holders,” “Holder” or “Holders” will, unless otherwise expressly indicated or unless the context otherwise requires, include the person serving as the Collateral Agent hereunder in its individual capacity to the extent such Person is an Initial Holder or, as the case may be, Holder. Such Person and its Affiliates may accept payments from, lend money to, own securities of, and generally engage in any kind of business with, the Company, any Company Party or any other Subsidiaries or Affiliates of the Company as if such Person were not the Collateral Agent hereunder and without any duty to account therefor to the Holders.

 

5.3            Exculpatory Provisions.

 

(a)            The Collateral Agent will not have any duties or obligations except those expressly set forth herein and in the other Transaction Documents, and its duties hereunder are administrative in nature. Without limiting the generality of the foregoing, the Collateral Agent:

 

(i)            will not be subject to any fiduciary or other implied duties, regardless of whether an Event of Default has occurred and is continuing;

 

(ii)            will not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Transaction Documents that the Collateral Agent is required to exercise as directed in writing by the Required Holders (or such other number or percentage of the Holders as will be expressly provided for herein or in the other Transaction Documents); provided, that the Collateral Agent will not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Collateral Agent to liability or that is contrary to any Transaction Document or any applicable statutes, rules, ordinances, regulations guidance documents, contract terms, and other requirements of all applicable governmental authorities, including any action that may be in violation of the automatic stay under any bankruptcy or insolvency; and

 

(iii)            will not, except as expressly set forth herein and in the other Transaction Documents, have any duty to disclose, and will not be liable for the failure to disclose, any information relating to the Companies or any of its Subsidiaries or Affiliates that is communicated to or obtained by the Person serving as the Collateral Agent or any of its Affiliates in any capacity.

 

(b)            The Collateral Agent will not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Holders (or such other number or percentage of the Holders as will be necessary, or as the Collateral Agent believes in good faith will be necessary, under the circumstances), or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment. The Collateral Agent will be deemed not to have knowledge of any Event of Default unless and until notice describing such Event of Default is given to the Collateral Agent in writing by the Companies or a Holder.

 

(c)            The Collateral Agent will not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Transaction Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Transaction Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth herein, other than to confirm receipt of items expressly required to be delivered to the Collateral Agent.

 

 

5.4            Reliance by Collateral Agent. The Collateral Agent will be entitled to rely upon, and will not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Collateral Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and will not incur any liability for relying thereon. In determining compliance with any condition hereunder that by its terms must be fulfilled to its satisfaction, the Collateral Agent may make such determination in its sole discretion, and in determining compliance with any condition hereunder that by its terms must be fulfilled to the satisfaction of a Holder, the Collateral Agent may presume that such condition is satisfactory to such Holder unless the Collateral Agent has received notice to the contrary from such Holder prior to the issuance of the Notes. The Collateral Agent may consult with legal counsel (who may be counsel for the Companies), independent accountants and other experts selected by it, and will not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

 

5.5            Delegation of Duties. The Collateral Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Transaction Document by or through any one or more sub-agents appointed by the Collateral Agent. The Collateral Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Affiliates. The exculpatory provisions of this Section will apply to any such sub-agent and to the Affiliates of the Collateral Agent and any such sub-agent, and will apply to their respective activities in connection with the syndication of the facility as well as activities as Collateral Agent. The Collateral Agent will not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Collateral Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.

 

5.6            Resignation of Collateral Agent.

 

(a)            The Collateral Agent may at any time give notice of its resignation to the Holders and the Companies, which notice shall set forth the effective date of such resignation (the “Resignation Effective Date”), such date not to be earlier than the thirtieth (30th) day following the date of such notice. The Required Holders and the Companies shall mutually agree upon a successor to the Collateral Agent. If the Required Holders and the Companies are unable to so mutually agree and no successor shall have been appointed within twenty-five (25) days after the retiring Collateral Agent gives notice of its resignation, then the retiring Collateral Agent may (but will not be obligated to), on behalf of the Holders, appoint a successor Collateral Agent it shall designate (in its reasonable discretion after consultation with the Companies and the Required Holders). Whether or not a successor has been appointed, such resignation will become effective in accordance with such notice on the Resignation Effective Date.

 

(b)            With effect from the Resignation Effective Date (i) the retiring Collateral Agent will be discharged from its duties and obligations hereunder and under the other Transaction Holders under any of the Transaction Documents, the retiring Collateral Agent will continue to hold such Collateral until such time as a successor Collateral Agent is appointed) and (ii) except for any indemnity payments owed to the retiring Collateral Agent, all payments, communications and determinations provided to be made by, to or through the Collateral Agent will instead be made by or to each Holder directly, until such time, if any, as the Required Holders appoint a successor Collateral Agent as provided for above. Upon the acceptance of a successor’s appointment as Collateral Agent hereunder, such successor will succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Collateral Agent (other than any rights to indemnity payments owed to the retiring Collateral Agent), and the retiring Collateral Agent will be discharged from all of its duties and obligations hereunder or under the other Transaction Documents. The fees payable by the Company to a successor Collateral Agent will be the same as those payable to its predecessor unless otherwise agreed between the Companies and such successor. After the retiring Collateral Agent’s resignation hereunder and under the other Transaction Documents, the provisions of this Article VI will continue in effect for the benefit of such retiring Collateral Agent, its sub-agents and their respective Affiliates in respect of any actions taken or omitted to be taken by any of them while the retiring Collateral Agent was acting as Collateral Agent.

 

5.7            Non-Reliance on Collateral Agent and Other Holders. Each Holder acknowledges that it has, independently and without reliance upon the Collateral Agent or any other Holder or any of their Affiliates and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Holder also acknowledges that it will, independently and without reliance upon the Collateral Agent or any other Holder or any of their Affiliates and based on such documents and information as it will from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Transaction Document or any related agreement or any document furnished hereunder or thereunder.

 

 

5.8            Collateral Agent May File Proofs of Claim. In case of the pendency of any bankruptcy or insolvency proceeding or any other judicial proceeding relative to the Company, the Collateral Agent (irrespective of whether the principal of the Notes will then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Collateral Agent has made any demand on the Company) will be entitled and empowered (but not obligated), by intervention in such proceeding or otherwise:

 

(a)            to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Notes and all other obligations that are owing and unpaid hereunder or under any other Transaction Document and to file such other documents as may be necessary or advisable in order to have the claims of the Holders and the Collateral Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Holders and the Collateral Agent and their respective agents and counsel and all other amounts due the Holders and the Collateral Agent under this Agreement or any other Transaction Document) allowed in such judicial proceeding; and

 

(b)            to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same.

 

Any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make any payments of the type described above in this Section 5.8 to the Collateral Agent and, in the event that the Collateral Agent consents to the making of such payments directly to the Holders, to pay to the Collateral Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Collateral Agent and its agents and counsel, and any other amounts due the Collateral Agent under this Agreement or any other Transaction Document.

 

5.9            Indemnification. Each Holder agrees to indemnify the Collateral Agent and each of its Related Parties (to the extent not reimbursed by the Borrower), from and against such Holder’s aggregate ratable share (based on the principal amount of the Notes held by the Holders) of any and all Losses that may be imposed on, incurred by, or asserted against, the Collateral Agent or any of its Related Parties in any way relating to or arising out of this Agreement or the other Transaction Documents or any action taken or omitted by the Collateral Agent under this Agreement or the other Transaction Documents; provided, that no Holder shall be liable for any portion of such Losses resulting from the Collateral Agent’s or such Related Party’s gross negligence or willful misconduct as finally determined by a court of competent jurisdiction. Without limiting the foregoing, each Holder agrees to reimburse the Collateral Agent and its Related Parties promptly upon demand for its ratable share of any out-of-pocket expenses (including fees, expenses and disbursements of financial and legal advisors) incurred by the Collateral Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of its rights or responsibilities under, this Agreement or the other Transaction Documents, to the extent that the Collateral Agent is not reimbursed for such expenses by the Company or another Company Party.

 

5.10            Collateral Matters; Appointment of Collateral Agent under other Transaction Documents.

 

(a)            Without limiting the provisions of Section 5.8, the Holders irrevocably agree as follows:

 

(i)            the Collateral Agent is authorized, at its option and in its discretion, to release any Lien on any property granted to or held by the Collateral Agent under any Transaction Document (A) on the date when all obligations have been satisfied in full in cash (other than contingent obligations as to which no claims have been asserted), (B) that is sold or otherwise disposed of or to be sold or otherwise disposed of as part of or in connection with any sale or other disposition permitted under the Transaction Documents, and

 

 

(ii)            Upon request by the Collateral Agent at any time, each Holder will confirm in writing the Collateral Agent’s authority to release or subordinate its interest in particular types or items of Collateral.

 

(b)            The Collateral Agent will not be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Collateral Agent’s lien thereon, or any certificate prepared by any Obligor in connection therewith, nor will the Collateral Agent be responsible or liable to the Holders for any failure to monitor or maintain any portion of the Collateral.

 

(c)            Each Holder hereby appoints the Collateral Agent as its collateral agent under each of the Transaction Documents and agrees that, in so acting, the Collateral Agent will have all of the rights, protections, exculpations, indemnities and other benefits provided to the Collateral Agent under this Agreement, and hereby authorizes and directs the Collateral Agent, on behalf of such Holder and all Holders, without the necessity of any notice to or further consent from any of the Holder, from time to time to (i) take any action with respect to any collateral or any Transaction Document which may be necessary to perfect and maintain perfected the liens on the collateral granted pursuant to any such Transaction Document or protect and preserve the Collateral Agent’s ability to enforce the liens or realize upon the collateral, (ii) act as collateral agent for each Holder that is a secured party for purposes of acquiring, holding, enforcing and perfecting all Liens created by the Transaction Documents and all other purposes stated therein, (iii) enter into non-disturbance or similar agreements in connection with licensing agreements and arrangements permitted by this Agreement and the other Transaction Documents and (iv) otherwise to take or refrain from taking any and all action that the Collateral Agent shall deem necessary or advisable in fulfilling its role as Collateral Agent under any of the Transaction Documents.

 

ARTICLE VI      MISCELLANEOUS

 

6.1            Termination and Survival. This Agreement may be terminated by each Holder, as to the Holder’s obligations hereunder only and without any effect whatsoever on the obligations between the Companies and the other Holders, by written notice to the Companies and the other Holders, if the Closing has not occurred on or before November 8, 2024. Termination of this Agreement will not affect the right of any party to sue for any breach by any other party (or parties) prior to such termination. The representations and warranties, covenants and other provisions hereof shall survive the Closing and the delivery of the Securities. Notwithstanding any termination of any Transaction Document, the reimbursement and indemnities to which the Holder Parties are entitled under the provisions of any Transaction Document shall continue in full force and effect and shall protect the Holder Parties against events arising after such termination as well as before.

 

6.2            Fees and Expenses. Whether or not the transactions contemplated hereby shall be consummated or any Securities shall be purchased, each Company agrees to pay promptly, or as indicated below, to each Holder Party, or reimburse each Holder Party for, the following:

 

(a)            all the actual and reasonable costs, fees and expenses of negotiation, preparation, execution and closing of the Transaction Documents and the purchase and sale of the Securities in connection therewith and the consummation of the other transactions contemplated hereby to be consummated on or about the Closing Date, including the reasonable fees, expenses and disbursements of counsel to such Holder Party in connection therewith; provided, that such reimbursement obligation shall not exceed $10,000 for the Collateral Agent and $50,000 for [INVESTOR] and its Related Parties, in the aggregate;

 

(b)            all the costs, fees and expenses of preparation, printing and distribution of any registration statement for the Securities or of the Transfer Agent (including any fees required for same-day processing of any instruction letter delivered by DHAC and any Notice of Conversion delivered by any Holder) and all other costs and expenses (including stamp taxes and other taxes and duties levied) incurred in connection with the delivery to or conversion by, any Holder of any Securities or the Conversion Shares;

 

(c)            all the actual and reasonable costs, fees and expenses of creating and perfecting Liens in favor of such Holder Party, pursuant to any Transaction Document, including costs associated with any Intellectual Property Security Agreement or Control Agreement, UCC fees, other filing and recording fees, expenses and taxes, stamp or documentary taxes, search fees, title insurance premiums and reasonable fees, expenses and disbursements of counsel to such Holder Party;

 

 

(d)            all the actual and reasonable costs, fees and expenses of administration of the Transaction Documents and preparation, execution and closing of any consents, amendments, waivers or other modifications thereto, including the reasonable fees, expenses and disbursements of counsel to such Holder Party in connection therewith and in connection with any other documents or matters requested by such Company Party (including through agents, contractors, trustees, representatives and advisors) or otherwise prepared or delivered in connection with any Transaction Document;

 

(e)            all the actual and reasonable costs, fees, expenses and disbursements of any auditors, accountants, consultants or appraisers used in connection with the Transaction Documents;

 

(f)            all the actual and reasonable costs, fees and expenses (including the reasonable fees, expenses and disbursements of any appraisers, consultants, advisors and agents employed or retained by such Holder Party and its counsel) in connection with the inspection, verification, custody or preservation of any collateral, to the extent required or permitted under any Transaction Document; and

 

(g)            all costs, fees and expenses, including reasonable attorneys’ fees (including allocated costs of internal counsel) and costs of settlement, incurred by any Holder in enforcing any obligation owed hereunder of or in collecting any payments due from any Company Party hereunder or under the other Transaction Documents (including in connection with the sale of, collection from, or other realization upon any collateral or the enforcement of any guaranty) or in connection with any negotiations, reviews, refinancing or restructuring of the credit arrangements provided hereunder, including in the nature of a “work out” or pursuant to any insolvency or bankruptcy cases or proceedings.

 

The foregoing shall be in addition to, and shall not be construed to limit, any other provisions of the Transaction Documents regarding indemnification and costs and expenses to be paid by the Company Parties.

 

6.3            Modifications and Signatures. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right. Any modification effected in accordance with accordance with this Section 6.3 shall be binding upon each Holder and holder of Securities and each Company.

 

(a)            Entire Agreement. This Agreement and the other Transaction Documents contain and constitute the entire agreement of the parties with respect to the subject matter hereof and supersede all prior negotiations, agreements, and understandings, whether written or oral, of the parties hereto, which the parties acknowledge have been merged into such documents.

 

(b)            Amendments. No amendment, modification or termination of any provision of this Agreement or any other Transaction Document shall be effective without the written consent of each Company and the Required Holders (or such other number of Holders as expressly stated in other provisions of the Transaction Documents); provided, that (i) if any amendment, modification or waiver disproportionately and adversely impacts a Holder (or group of Holders), the consent of holders of a majority of the principal amount of the Notes held by such disproportionately impacted Holder (or group of Holders) shall also be required and (ii) this clause (b) may only be modified with the consent of all Holders. No waiver or consent shall be effective against any party unless given in writing and then any such waiver shall then be effective only in the specific instance and for the specific purpose for which it was given. Where the consent or waiver of the Holders generally (and not each Holder) is required, it may be given by the Required Holders.

 

(c)            Successors and Assigns. This Agreement shall bind and inure solely to the benefit of the Company Parties, the Holder Parties, and their respective successors and, if permitted, assigns; provided, that the Company Parties may not assign this Agreement or any other Transaction Document or any rights or obligations hereunder or thereunder without the Required Holder’s prior written consent and any prohibited assignment shall be absolutely void. Unless otherwise expressly provided in any Transaction Document, each Holder may sell, assign, transfer, negotiate or grant participations in all or any part of, or any interest in, or any right or remedy under, the Securities and the Transaction Documents without the consent of the Company Parties; provided, that any transferee of the Securities shall agree in writing to be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the “Holder” (and any attempt to effect such transfer without securing such agreement shall be null and void).

 

 

(d)            No Waiver by Course of Dealing. No notice to or demand on any Company Party, whether or not in any Proceeding, pursuant to any Transaction Document shall entitle any Company Party to any other or further notice (except as specifically required hereunder or under any other Transaction Document) or demand in similar or other circumstances. The failure by any Holder Party at any time or times to require strict performance by any Company Party of any provision of this Agreement or any of the other Transaction Documents or the granting of any waiver or indulgence shall not waive, affect or otherwise diminish any right of any Holder Party thereafter to demand strict compliance and performance with such provision, shall not affect or be a waiver under any other provision of any Transaction Document except as specifically mentioned and shall not constitute a course of dealing by such Holder Party at variance with the terms of this Agreement or any other Transaction Document (and therefore, among other things, shall not require further notice by such Holder Party of its intent to require strict adherence to the terms of such Transaction Document in the future). Any such actions shall not in any way affect the ability of each Holder Party, in its discretion, to exercise any rights available to it under this Agreement, the other Transaction Documents or under applicable Regulations.

 

(e)            Execution in Counterparts. This Agreement may be executed in counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and both of which, when taken together, shall constitute but one and the same Agreement. In proving this Agreement in any judicial proceedings, it shall not be necessary to produce or account for more than one such counterpart signed by the party against whom such enforcement is sought.

 

(f)            Electronic Signatures. Each party agrees that the electronic signatures, whether digital or encrypted, of the parties included in this Agreement or any other Transaction Document are intended to authenticate this writing and to have the same force and effect as manual signatures. Electronic signature means any electronic sound, symbol, or process attached to or logically associated with a record and executed and adopted by a party with the intent to sign such record, including facsimile or email electronic signatures. The Borrower expressly agrees that this Agreement and all other Transaction Documents are “transferable records” as defined in applicable Regulations relating to electronic transaction and that it may be created, authenticated, stored, transmitted and transferred in a manner consistent with and permitted by such applicable Regulations.

 

6.4            Notices.

 

(a)            All notices, requests, demands, and other communications to either party hereto or given under any Transaction Document shall be in writing (including electronic mail transmission or similar writing) and shall be given to such party at the physical address or send to the electronic mailing address set forth in the signature pages hereof or at such other physical address or electronic mailing address as such party may hereafter specify for the purpose of notice to the Holders and the Companies in accordance with the provisions of this Section 6.4.

 

(b)            Each such notice, request or other communication shall be effective (i) if given by mail, three (3) Trading Days after such communication is deposited in the U.S. Mail with first class postage pre-paid, addressed to the noticed party at the address specified herein, (ii) if by nationally recognized overnight courier, when delivered with receipt acknowledged in writing by the noticed party, (iii) if given by personal delivery, when duly delivered with receipt acknowledged in writing by the noticed party or (iv) if given by electronic mail, when delivered (receipt by the sender of a receipt using the “return receipt” function or receipt of a reply email being presumptive evidence of receipt thereof); provided, that if such electronic mail is not sent prior to the last trading hour of the principal Trading Market of the Securities on a Trading Day, such electronic mail shall be deemed to have been sent at the opening of trading on the next Trading Day for such principal Trading Market. Any written notice, request or demand that is not sent in conformity with the provisions hereof shall nevertheless be effective on the date that such notice, request or demand is actually received by the individual to whose attention at the noticed party such notice, request or demand is required to be sent.

 

 

6.5            Set-Off. In addition to any rights now or hereafter granted under applicable Regulations and not by way of limitation of any such rights, each Holder Party is hereby authorized by the Company Parties at any time or from time to time, without notice or demand to any Company Party or to any other Person, any such notice or demand being hereby expressly waived, to set off and to appropriate and to apply any and all deposits (general or special, time or demand, provisional or final, including indebtedness evidenced by certificates of deposit, whether matured or unmatured, but not including trust accounts) and any other indebtedness or other amounts at any time held or owing by such Company Party to or for the credit or the account of any Company Party or any of their Related Parties against and on account of any amounts due by any Company Party or any of their Related Parties to any Holder Party under any Transaction Documents, irrespective of whether or not (a) such Holder Party shall have made any demand hereunder or (b) the principal of or the interest on the Notes or any other Obligation shall have become due and payable and although such obligations and liabilities, or any of them, may be contingent or unmatured. If, as a result of such set off, appropriate or application, such Holder Party receives more than it is owed under any Transaction Document, it shall hold such amounts in trust for the other Holder Parties and transfer such amounts to the other Holder Parties ratably according to the amounts they are owed on the date of receipt.

 

6.6            Governing Law.

 

(a)            Except as otherwise expressly provided in any other Transaction Document, this Agreement, the other Transaction Documents and all claims, Proceedings and matters arising hereunder or thereunder or related hereto or thereto are governed by, and construed and enforced in accordance with, the laws of the State of Delaware.

 

(b)            Any Proceeding with respect to any Transaction Document may be brought exclusively in the Delaware State courts sitting in New Castle County or the federal courts of the United States of America for the District of Delaware and sitting in New Castle County. Each Company Party (i) accepts for itself and in respect of its property, generally and unconditionally, the non-exclusive jurisdiction of such courts, (ii) irrevocably waives any objection, including any objection to the laying of venue, based on the grounds of forum non conveniens or that such jurisdiction is improper or otherwise that such party is not subject to the jurisdiction of such courts, that it may now or hereafter have to the bringing of any Proceeding in those jurisdictions, (iii) irrevocably consents to the service of process of any court referred to above in any Proceeding by the mailing of copies of the process to the parties hereto as provided in Section 6.4 and (iv) agrees that a final judgment in any such Proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Service effected as provided in this manner will become effective ten (10) calendar days after the mailing of the process. Notwithstanding the foregoing, nothing contained in any Transaction Document shall affect the right of any Holder Party to serve process in any other manner permitted by applicable Regulations or commence Proceedings or otherwise proceed against any Company Party in any other jurisdiction.

 

6.7            Severability. Any provision of any Transaction Document being held illegal, invalid or unenforceable in any jurisdiction shall not affect any part of such provision not held illegal, invalid or unenforceable, any other provision of any Transaction Document or any part of such provision in any other jurisdiction, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party. In addition, upon any determination that any such term or other provision is invalid, illegal or incapable of being enforced, the parties hereto will negotiate in good faith to modify the relevant Transaction Document so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.

 

6.8            Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of the other Transaction Documents, whenever any Holder exercises a right, election, demand or option under a Transaction Document and a Company Party does not timely perform its related obligations within the periods therein provided, then such Holder may rescind or withdraw, in its sole discretion from time to time upon written notice to the Companies, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights.

 

 

6.9            Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the applicable Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the applicable Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.

 

6.10            Remedies.

 

(a)            In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each Holder (severally and not jointly) and each Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.

 

(b)            If any Company Party shall fail to discharge any covenant, duty or obligation hereunder or under any of the other Transaction Documents, each Holder may, in its discretion at any time, for the account and at the expense of the Company Parties jointly and severally, pay any amount or do any act required of such Company Party hereunder or under any of the other Transaction Documents or otherwise lawfully requested by any Holder. All costs and expenses incurred by any Holder in connection with the taking of any such action shall be reimbursed to such Holder by the Company Party on demand with interest at the highest interest rate applicable to amounts due under the Notes of such Holder from the date such payment is made or such costs or expenses are incurred to the date of payment thereof. Any payment made or other action taken by any Holder under this clause (b) shall be without prejudice to any right to assert, and without waiver of, any breach of any Transaction Document and without prejudice to any Holder Party’s right to proceed thereafter as provided herein or in any of the other Transaction Documents.

 

(c)            The remedies provided in this Agreement and all other Transaction Documents shall be cumulative and in addition to all other remedies available under any Transaction Document, whether at law or in equity (including a decree of specific performance and/or other injunctive relief).

 

(d)            Nothing in any Transaction Document shall limit the Holder Party’s rights to pursue actual and consequential damages for any failure by any Company Party to comply with the terms of this Agreement or any other Transaction Document.

 

(e)            An Event of Default will cause irreparable harm to the Holders and that the remedy at law for any such breach may be inadequate. Therefore, in the event of any such Event of Default, the Holders shall be entitled, in addition to all other available remedies, to an injunction restraining any such breach or any such threatened breach, without the necessity of showing economic loss and without any bond or other security being required.

 

6.11            Marshaling; Payment Set Aside. No Holder Party shall be under any obligation to marshal any property in favor of any Company Party or any other party or against or in payment of any amount due under any Transaction Document. To the extent that any Company Party makes a payment or payments to any Holder pursuant to any Transaction Document or any Holder Party enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to any Company Party, a trustee, receiver or any other Person under any law (including any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor, shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

 

 

6.12            Usury. To the extent it may lawfully do so, each Company Party hereby agrees not to insist upon or plead or in any manner whatsoever claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any time hereafter in force, in connection with any claim, action or proceeding that may be brought by any Holder in order to enforce any right or remedy under any Transaction Document. Notwithstanding any provision to the contrary contained in any Transaction Document, it is expressly agreed and provided that the total liability of each Company Party under the Transaction Documents for payments in the nature of interest shall not exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”) and, without limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums in the nature of interest that any Company Party may be obligated to pay under the Transaction Documents exceed such Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by law and applicable to the Transaction Documents is increased or decreased by statute or any official governmental action subsequent to the date hereof, the new maximum contract rate of interest allowed by law will be the Maximum Rate applicable to the Transaction Documents from the effective date thereof forward, unless such application is precluded by applicable law. If under any circumstances whatsoever, interest in excess of the Maximum Rate is paid by any Company Party to any Holder Party with respect to indebtedness evidenced by the Transaction Documents, such excess shall be applied by such Holder Party to the unpaid principal balance of any such indebtedness or be refunded to the applicable Company, the manner of handling such excess to be at such Holder’s election.

 

6.13            Liquidated Damages. Any Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents is a continuing obligation of such Company and shall not terminate until all unpaid partial liquidated damages and other amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts are due and payable shall have been canceled.

 

6.14            Further Assurances. The Company Parties agree to take such further actions as each Holder shall reasonably request from time to time in connection herewith to evidence, give effect to or carry out this Agreement and the other Transaction Documents and any of the transactions contemplated hereby or thereby.

 

 

6.15            Interpretation. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of any Transaction Document. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement. Except as otherwise expressly provided in any Transaction Document, if the last or appointed day for the taking of any action or the expiration of any right required or granted under any Transaction Document shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day. As used in any Transaction Document, references to the singular will include the plural and vice versa and references to the masculine gender will include the feminine and neuter genders and vice versa, as appropriate. When used in any Transaction Document, unless otherwise expressly provided in such Transaction Document, (a) the words “hereof,” “herein” and “hereunder” and words of similar import refer to such Transaction Document as a whole and not to any particular provision of such Transaction Document, (b) recital, article, section, subsection, schedule and exhibit references are references with respect to such Transaction Document unless otherwise specified, (c) any reference to any agreement shall include a reference to all recitals, appendices, exhibits and schedules to such agreement and, unless the prior written consent of any party is required hereunder and is not obtained, shall be a reference to such agreement as waived, amended, restated, supplemented or otherwise modified and (d) any reference to a specific Regulation shall be to such Regulation, as modified from time to time, together with any successor or replacement Regulation, in each case as in effect at the time of determination. Unless the context otherwise requires, when used in any Transaction Document, the following terms have the following meaning: (u) “execution,” “signed,” “signature” and words of like import shall be deemed to include electronic signatures and the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable Regulation, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other similar state Regulation based on the Uniform Electronic Transactions Act, (v) “incur” means incur, create, make, issue, assume or otherwise become or remain directly or indirectly liable in respect of or responsible for, in each case whether directly or indirectly, as primary obligor or guarantor or endorser, and the terms “incurrence” and “incurred” and similar derivatives shall have correlative meanings, (w) “knowledge” of the any Company Party means the best knowledge of any officer, director or employee of such Company Party after due inquiry, (x) “including” means “including, without limitation,” (y) “asset” and “property” have the same meaning and mean, “collectively, all rights and interests in tangible and intangible assets and properties, whether real, personal or mixed and including cash, capital stock, revenues, accounts, leasehold interests, contract rights and other rights under Permits and Contractual Obligations” and (z) “documents” and “documentation” have the same meaning and mean “collectively, all documents, drafts, instruments, agreements, indentures, certificates, forms, opinions, powers of attorney, notices, summons, reports, financial statements and other writings, however evidenced, whether in physical or electronic form.” The headings in this Agreement are included for convenience of reference only and will not affect in any way the meaning or interpretation of this Agreement. All references in this Agreement or any other Transaction Document to statutes and regulations shall include all amendments of same and implementing regulations and any successor statutes and regulations; to any instrument or agreement (including any of the Transaction Documents) shall include any and all modifications and supplements thereto and any and all restatements, extensions or renewals thereof to the extent such modifications, supplements, restatements, extensions or renewals of any such documents are permitted by the terms hereof and thereof. An Event of Default shall be deemed to exist at all times during the period commencing on the date that such Event of Default occurs to the date on which such Event of Default is waived in writing pursuant to the relevant Note or, with respect to any Default, is cured within any period of cure expressly provided in the relevant Note. Whenever in any provision of any Transaction Document, any Holder is authorized to take or decline to take any action (including making any determination) in the exercise of its “discretion,” such provision shall be understood to mean that such Holder may take or refrain to take such action in its sole discretion. References to times of the day in any Transaction Document shall refer to Eastern Time. In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including,” the words “to” and “until” each mean “to but excluding” and the word “through” means “to and including.” Time is of the essence of this Agreement and the other Transaction Documents. No provision of this Agreement or any of the other Transaction Documents shall be construed against or interpreted to the disadvantage of any party hereto by any Governmental Authority by reason of such party having or being deemed to have structured, drafted or dictated such provision. “month” (but not “calendar month”) means each period from a date of determination to the day (including the Closing Date itself) in the next calendar month numerically-corresponding to such date (provided, that, if such calendar month does not have any such numerically-corresponding day, such numerically-corresponding day shall be deemed to be the last day of such calendar month).

 

6.16            Waiver of Jury Trial and Certain Other Rights.

 

(a)            The parties hereto hereby irrevocably and unconditionally waive, to the fullest extent permitted by applicable Regulations, any right that they may have to trial by jury of any claim or cause of action or in any Proceeding, directly or indirectly based upon or arising out of this Agreement or any Transaction Document (whether based on contract, tort or any other theory). Each party (a) certifies that no representative, agent, or attorney of any other party has represented, expressly or otherwise, that such other parties would not, in the event of litigation, seek to enforce the foregoing waiver and (b) acknowledges that it and the other parties have been induced to enter into this Agreement and the other Transaction Documents by, among other things, the mutual waivers and certifications in this section.

 

(b)            Each Company Party acknowledges and agrees that the foregoing waivers are a material inducement to the Holders to enter into and accept this Agreement. Each Company Party has reviewed the foregoing waivers with its legal counsel and has knowingly and voluntarily waived its jury trial rights following consultation with such legal counsel. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court. This Section 6.16 shall not restrict a party from exercising remedies under the UCC or from exercising pre-judgement remedies under applicable Regulations.

 

[Signature Pages Follow]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Exchange Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

 

Digital Health Acquisition Corp.			Address for Notice:
By:			Fax:
	Name: Scott Wolf		Email:
	Title: Chief Executive Officer
VSee Lab, Inc.			Address for Notice:
By:			Fax:
	Name: Milton Chen		Email:
	Title: Chief Executive Officer
iDoc Virtual Telehealth Solutions, Inc.			Address for Notice:
By:			Fax:
	Name: Imoigele Aisiku		Email:
	Title: Chief Executive Officer

 

[Signature Pages for Holder Follow]

 

EXCHANGE AGREEMENT FOR DIGITAL HEALTH ACQUISITION CORP.

 

 

IN WITNESS WHEREOF, the undersigned have caused this Exchange Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

 

Name of Holder/Collateral Agent:	[INVESTOR]
Signature of Authorized Signatory of  Holder/Collateral Agent:	By:
	Name:
	Title:

 

Address for Notices to Holder/Collateral Agent:

  

Email:

 

EIN Number: _______________________

 

EXCHANGE AGREEMENT FOR DIGITAL HEALTH ACQUISITION CORP.

 

 

SCHEDULE I

 

ORIGINAL NOTES

 

Default Through October 1, 2023		VSee				iDoc				DHAC
Holder			[INVESTOR]				[INVESTOR]				[INVESTOR]
Principal			600,000.00	(1)			600,000.00	(1)			800,000.00
OID			66,666.67				66,666.67				88,888.89
Interest			66,666.67				66,666.67				88,888.89
Mandatory Default Amount			183,333.33				183,333.33				244,444.44
Late Fee			73,333.33				73,333.33				97,777.78
Default Interest			127,123.29				127,123.29				169,497.71
Total(2)			1,117,123.29				1,117,123.29				1,489,497.71

  

(1)

Amount of the applicable Original Note as consideration for purchase of shares of common stock of VSee and iDoc, as applicable, pursuant to separate Securities Purchase Agreements, each dated as of the date hereof, between the Initial Holders and each of VSee and iDoc.

 

(2)

An aggregate amount of $2,523,744.29 of the Original Notes after excluding amounts specified in Note (1) above for exchange of the new Notes set forth on Schedule II.

 

 

SCHEDULE II

 

NOTES

 

1 – Name of Holder	2 – Principal Amount Exchange Notes
[INVESTOR]	$2,523,744.29

 

 

EXHIBIT A

 

FORM OF NOTE

 

 

EXHIBIT B

 

FORM OF REGISTRATION RIGHTS AGREEMENT

 

 

EXHIBIT C

 

FORM OF LOCK-UP AGREEMENT

 

 

EXHIBIT D

 

FORM OF TRANSFER AGENT INSTRUCTION LETTER