Form of Voting Agreement, dated February 8, 2021
[FORM OF] VOTING AGREEMENT
This VOTING AGREEMENT (this Agreement), dated as of February 8, 2021, is entered into by and between the undersigned stockholder (the Stockholder) of Mohawk Group Holdings, Inc., a Delaware corporation (the Company), and the Company. The Company and the Stockholder are each sometimes referred to herein individually as a Party and collectively as the Parties. Capitalized terms that are used but not defined herein shall have the meaning ascribed to them in the February Purchase Agreement (as defined below).
A. The Company has entered, or will enter, into (i) a Securities Purchase Agreement, dated as of November 30, 2020 (as the same may be amended from time to time, the November Purchase Agreement), providing for, among other things, the sale to the Buyers of the Notes (as such terms are defined in the November Purchase Agreement) pursuant to the terms and conditions of the November Purchase Agreement and the Transaction Documents (as defined in the November Purchase Agreement), (ii) a Securities Purchase Agreement, dated as of February 2, 2021 (as the same may be amended from time to time, the February Purchase Agreement), providing for, among other things, the sale to the Buyers of the Purchased Securities (as such terms are defined in the February Purchase Agreement) pursuant to the terms and conditions of the February Purchase Agreement and the Transaction Documents (as defined in the February Purchase Agreement), (iii) a Letter Agreement, dated as of the date hereof (as the same may be amended from time to time, the Warrant Letter Agreement), providing for, among other things, the issuance to High Trail Investments SA LLC (High Trail) of the Penny Warrant and the February Warrant (as such terms are defined in the Warrant Letter Agreement) pursuant to the terms and conditions of the Warrant Letter Agreement and (iv) the Asset Purchase Agreement, dated February 2, 2021, by and among the Company and Truweo, LLC, as Purchaser, Healing Solutions, LLC, Jason R. Hope, and for the purposes of Section 5.11 and Article VII, Super Transcontinental Holdings LLC pursuant to which after the closing thereof the Company may issue up to an additional 1,016,912 shares of Common Stock (which, for avoidance of doubt includes up to 208,242 shares of Common Stock issuable to certain consultants) (the Healing Solutions Post-Closing Shares). The Notes, the Purchased Securities, the February Warrant, the Penny Warrant and the Healing Solutions Post-Closing Shares described in clauses (i), (ii), (iii) and (iv) above are collectively referred to herein as the Covered Securities.
B. For good and valuable consideration, the sufficiency of which is hereby acknowledged, the Stockholder hereby makes certain representations, warranties, covenants, and agreements as set forth in this Agreement with respect to the shares of Common Stock Beneficially Owned by the Stockholder and set forth below the Stockholders signature on the signature page hereto (the Original Shares and, together with any additional shares of Common Stock pursuant to Section 5 hereof, the Shares).
NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
1. Definitions. For purposes of this Agreement, capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed to such terms in the February Purchase Agreement. When used in this Agreement, the following terms in all of their tenses, cases, and correlative forms shall have the meanings assigned to them in this Section 1.
(a) Beneficially Own or Beneficial Ownership has the meaning assigned to such term in Rule 13d-3 under the 1934 Act, and a Persons beneficial ownership of securities shall be calculated in accordance with the provisions of such rule (in each case, irrespective of whether or not such rule is actually applicable in such circumstance). For the avoidance of doubt, Beneficially Own and Beneficial Ownership shall also include record ownership of securities.
(b) Beneficial Owner shall mean the Person who Beneficially Owns the referenced securities.
2. Representations of Stockholder. The Stockholder represents and warrants to the Company that:
(a) Ownership of Shares. The Stockholder: (i) is the Beneficial Owner of all of the Original Shares set forth below the Stockholders signature on the signature pages hereto free and clear of any proxy, voting restriction, adverse claim, or other Liens, other than those created by this Agreement or under applicable federal or state securities laws, other than any restrictions on restricted shares held by the Beneficial Owner pursuant to the Companys 2018 Equity Incentive Plan or the Companys 2019 Equity Plan; and (ii) has the sole voting power over all such Original Shares. Except pursuant to this Agreement, there are no options, warrants, or other rights, agreements, arrangements, or commitments of any character to which the Stockholder is a party relating to the pledge, disposition, or voting of any such Original Shares and there are no voting trusts or voting agreements with respect to such Original Shares, other than any restrictions on restricted shares held by the Beneficial Owner pursuant to the Companys 2018 Equity Incentive Plan or the Companys 2019 Equity Plan.
(b) Disclosure of All Shares Owned. The Stockholder does not Beneficially Own any shares of Company Common Stock other than: (i) the Original Shares set forth below the Stockholders signature on the signature pages hereto; and (ii) any options, warrants, or other rights to acquire any additional shares of Company Common Stock or any security exercisable for or convertible into shares of Company Common Stock, set forth below the Stockholders signature on the signature pages hereto (collectively, Options).
(c) Power and Authority; Binding Agreement. If the Stockholder is an individual, the Stockholder has full power and authority and legal capacity to enter into, execute, and deliver this Agreement and to perform fully the Stockholders obligations hereunder (including the proxy described in Section 3(b) below). If the Stockholder is not an individual, the Stockholder has the requisite organizational power and authority to enter into, execute, and deliver this Agreement and to perform fully the Stockholders obligations hereunder (including the proxy described in Section 3(b) below). This Agreement has been duly and validly executed and delivered by the Stockholder and constitutes the legal, valid, and binding obligation of the Stockholder, enforceable against the Stockholder in accordance with its terms.
(d) No Conflict. The execution and delivery of this Agreement by the Stockholder does not, and the consummation of the transactions contemplated hereby and the compliance with the provisions hereof will not, conflict with or violate any law applicable to the Stockholder or result in any breach of or violation of, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration, or cancellation of, or result in the creation of any Lien on any of the Shares attributable to the Stockholder pursuant to, any agreement or other instrument or obligation binding upon the Stockholder or any of the Shares attributable to the Stockholder.
(e) No Consents. No consent, approval, order, or authorization of, or registration, declaration, or filing with, any Governmental Entity or any other Person on the part of the Stockholder is required in connection with the valid execution and delivery of this Agreement. If the Stockholder is an individual, no consent of the Stockholders spouse is necessary under any community property or other laws in order for the Stockholder to enter into and perform its obligations under this Agreement.
(f) No Litigation. There is no action, suit, investigation, or proceeding (whether judicial, arbitral, administrative, or other) pending against, or, to the knowledge of the Stockholder, threatened against or affecting, the Stockholder that could reasonably be expected to materially impair or materially adversely affect the ability of the Stockholder to perform the Stockholders obligations hereunder or to consummate the transactions contemplated by this Agreement on a timely basis.
3. Agreement to Vote Shares; Irrevocable Proxy.
(a) Agreement to Vote and Approve. The Stockholder irrevocably and unconditionally agrees during the term of this Agreement, at any annual or special meeting of the Company called with respect to the approval contemplated by Nasdaq Listing Rule 5635(a) and /or 5635(d) with respect to the issuance of shares of Common Stock pursuant to, upon conversion or exercise of, or otherwise in exchange for, the Covered Securities in excess of the limitations imposed by such rule, and at every adjournment or postponement thereof, and on every action or approval by written consent or consents of the Company stockholders with respect to such matter, to vote or cause the holder of record to vote the Shares in favor of providing the Requisite Stockholder Approval (as defined in the Letter Agreement).
(b) Irrevocable Proxy. The Stockholder hereby appoints the Company and any designee of the Company, and each of them individually, until the Expiration Time (at which time this proxy shall automatically be revoked), its proxies and attorneys-in-fact, with full power of substitution and resubstitution, to vote or act by written consent during the term of this Agreement with respect to the Shares in accordance with Section 3(a), in each case if and only if the Stockholder: (i) fails to vote, or (ii) attempts to vote (whether by proxy, in person or by written consent) in a manner which is inconsistent with the terms of this Agreement). This proxy and power of attorney is given to secure the performance of the duties of the Stockholder under this Agreement. The Stockholder shall take such further action or execute such other instruments as may be necessary to effectuate the intent of this proxy. This proxy and power of attorney granted by the Stockholder shall be irrevocable during the term of this Agreement, shall be deemed to be coupled with an interest sufficient in law to support an irrevocable proxy, and shall revoke any and all prior proxies granted by the Stockholder with respect to the Shares. The power of attorney granted by the Stockholder herein is a durable power of attorney and shall survive the bankruptcy, death, or incapacity of the Stockholder. The proxy and power of attorney granted hereunder shall terminate upon the termination of this Agreement.
4. No Voting Trusts or Other Arrangement. The Stockholder agrees that during the term of this Agreement the Stockholder will not, and will not permit any entity under the Stockholders control to, deposit any of the Shares in a voting trust, grant any proxies with respect to the Shares, or subject any of the Shares to any arrangement with respect to the voting of the Shares, in each case other than agreements entered into with the Company.
5. Additional Shares. The Stockholder agrees that all shares of Common Stock that the Stockholder purchases, acquires the right to vote, or otherwise acquires Beneficial Ownership of, after the execution of this Agreement and prior to the Expiration Time shall be subject to the terms and conditions of this Agreement and shall constitute Shares for all purposes of this Agreement. In the event of any stock split, stock dividend, merger, reorganization, recapitalization, reclassification, combination, exchange of shares, or the like of the capital stock of the Company affecting the Shares, the terms of this Agreement shall apply to the resulting securities and such resulting securities shall be deemed to be Shares for all purposes of this Agreement.
6. Termination. This Agreement shall terminate upon the earliest to occur of (the Expiration Time): (a) the termination of this Agreement by mutual written consent of the Parties; and (b) the date on which the Requisite Stockholder Approval is obtained. Nothing in this Section 6 shall relieve or otherwise limit the liability of any Party for any intentional breach of this Agreement prior to such termination.
7. No Agreement as Director or Officer. The Stockholder makes no agreement or understanding in this Agreement in its capacity as a director or officer of the Company or any of its subsidiaries (if the Stockholder holds such office), and nothing in this Agreement: (a) will limit or affect any actions or omissions taken by the Stockholder in its capacity as such a director or officer, and no such actions or omissions shall be deemed a breach of this Agreement; or (b) will be construed to prohibit, limit, or restrict the Stockholder from exercising its fiduciary duties as an officer or director to the Company or its stockholders.
8. Further Assurances. The Stockholder agrees, from time to time, and without additional consideration, to execute and deliver such additional proxies, documents, and other instruments and to take all such further action as the Company may reasonably request to consummate and make effective the transactions contemplated by this Agreement.
9. Stop Transfer Instructions. At all times commencing with the execution and delivery of this Agreement and continuing until the Expiration Time, in furtherance of this Agreement, the Stockholder hereby authorizes the Company or its counsel to notify the Companys transfer agent that there is a stop transfer order with respect to all of the Shares (and that this Agreement places limits on the voting of the Shares), subject to the provisions hereof and provided that any such stop transfer order and notice will immediately be withdrawn and terminated by the Company following the Expiration Time.
10. Specific Performance. Each Party hereto acknowledges that it will be impossible to measure in money the damage to the other Party if a Party hereto fails to comply with any of the obligations imposed by this Agreement, that every such obligation is material and that, in the event of any such failure, the other Party will not have an adequate remedy at law or damages. Accordingly, each Party hereto agrees that injunctive relief or other equitable remedy, in addition to remedies at law or damages, is the appropriate remedy for any such failure and will not oppose the seeking of such relief on the basis that the other Party has an adequate remedy at law. Each Party hereto agrees that it will not seek, and agrees to waive any requirement for, the securing or posting of a bond in connection with the other Partys seeking or obtaining such equitable relief.
11. Amendment; Assignment. No provision of this Agreement may be amended other than by an instrument in writing signed by the Company and the Stockholder. No Party to this Agreement may assign any of its rights or obligations under this Agreement without the prior written consent of the other Party hereto, except that the Company may assign, in its sole discretion, all or any of its rights, interests and obligations hereunder to any of its affiliates (as defined in Rule 144) or to any party that acquires all of substantially all of the assets of the Company (whether by merger, sale of stock, sale of assets or otherwise). Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the Parties and their respective permitted successors and assigns. Any assignment contrary to the provisions of this Section 11 shall be null and void.
12. Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party) or electronic mail (provided that such sent email is kept on file (whether electronically or otherwise) by the sending party and the sending party does not receive an automatically generated message from the recipients email server
that such e-mail could not be delivered to such recipient); or (iii) one (1) Business Day after deposit with an overnight courier service with next day delivery specified, in each case, properly addressed to the party to receive the same. The addresses, facsimile numbers and e-mail addresses for such communications shall be:
If to the Company:
Mohawk Group Holdings, Inc.
37 E. 18th Street, 7th Floor
New York, NY 10003
Attention: Yaniv Sarig, President & CEO
E-mail: [ *** ]
With a copy (for informational purposes only) to:
Paul Hastings LLP
1117 S. California Avenue
Palo Alto, CA 94304 Attention: Jeff Hartlin
Email: [ *** ]
If to the Stockholder, to the address, email address, or facsimile number set forth for the Stockholder on the signature pages hereof.
13. Miscellaneous. The provisions of Sections 9(a), (b), (c), (d), (e), (g), (h), (j), (l), (m), (o) and (p) of the February Purchase Agreement shall apply to this Agreement, mutatis mutandis.
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IN WITNESS WHEREOF, the Parties hereto have executed and delivered this Agreement as of the date first written above.
|MOHAWK GROUP HOLDINGS, INC.|
|Number of Shares of Company Common Stock Beneficially Owned as of the date of this Agreement:|
|Number of Options Beneficially Owned as of the date of this Agreement:|
[Signature Page to Voting Agreement]