Exhibit 10.5
NEITHER
THIS WARRANT, NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT (COLLECTIVELY, THE “SECURITIES”), HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY STATE SECURITIES OR BLUE SKY LAWS. THE
SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE OFFERED, FOR SALE, SOLD, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED OR ASSIGNED EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES OR BLUE SKY LAWS, PURSUANT
TO REGISTRATION OR QUALIFICATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS
OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE COMPANY MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY
TO THE COMPANY TO THE EFFECT THAT ANY PROPOSED TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES
OR BLUE SKY LAWS.
PRESTO
AUTOMATION INC.
Warrant
To Purchase Common
Stock
Warrant No.: 2024-1
Number of Shares of Common Stock: 1,935,746
Date of Issuance: January 30, 2024 (“Issuance Date”)
Date of Amendment and Restatement: May 16, 2024
Presto Automation Inc., a
Delaware corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, CEOF Holdings LP, the registered holder hereof or its permitted assigns (the
“Holder”), is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise Price
(as defined below) then in effect, at any time or times on or after the Issuance Date, but not after 11:59 p.m., New York time, on
the Expiration Date (as defined below), 1,935,746 duly authorized, validly issued, fully paid, nonassessable shares of Common Stock,
subject to adjustment as provided herein (the “Warrant Shares”). Except as otherwise defined herein, capitalized
terms in this Warrant to Purchase Common Stock (including any Warrants to Purchase Common Stock issued in exchange, transfer or
replacement hereof, this “Warrant”) shall have the meanings set forth in Section 18. The Warrant is being issued
pursuant to Section 8(i)(4) of that certain Forbearance and Fourth Amendment to Credit Agreement, dated January 22, 2024, among
Presto Automation LLC (f/k/a E La Carte, LLC, f/k/a Ventoux Merger Sub II LLC), the Company, Metropolitan Partners Group
Administration, LLC, as agent, and the Lenders (as defined therein) (the “Forbearance Agreement”). Capitalized
terms used herein and not otherwise defined shall have the definitions ascribed to such terms in the Forbearance Agreement or the
Credit Agreement (as defined in the Forbearance Agreement). This Warrant amends, restates and supersedes in its entirety (i) that
certain Warrant for 677,511 shares of Common Stock issued by the Company to the Holder on January 30, 2024 (the “Original
Warrant”) and (ii) that certain Warrant for 1,084,018 shares of Common Stock issued by the Company to the Holder on March 21, 2024 (the “March
2024 Warrant”).
1. EXERCISE
OF WARRANT.
(a) Mechanics
of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section 1(f)),
this Warrant may be exercised by the Holder at any time or times on or after the Issuance Date, in whole or in part, by (i) delivery
(whether via facsimile or otherwise) of a written notice, in the form attached hereto as Exhibit A (the “Exercise Notice”),
of the Holder’s election to exercise this Warrant and (ii) (A) payment to the Company of an amount equal to the applicable Exercise
Price multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the “Aggregate Exercise Price”)
in cash by wire transfer of immediately available funds or (B) if the provisions of Section 1(d) are applicable, by notifying the Company
that this Warrant is being exercised pursuant to a Cashless Exercise. The Holder shall not be required to physically surrender this Warrant
to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full,
in which case the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days after the date the
Warrant Shares which are the subject of the Exercise Notice being delivered to the Holder. Partial exercises of this Warrant resulting
in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding
number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and
the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Holder and any
assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase
of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be
less than the amount stated on the face hereof. On or before the third (3rd) Trading Day following the date on which the Company
has received the Exercise Notice (the “Share Delivery Date”), so long as the Holder delivers the Aggregate Exercise
Price (or notice of a Cashless Exercise) on or prior to the second (2nd) Trading Day following the date on which the Company has received
the Exercise Notice (provided that if the Aggregate Exercise Price (or notice of a Cashless Exercise) has not been delivered by such
date, the Share Delivery Date shall be extended one (1) Trading Day after the Aggregate Exercise Price (or notice of a Cashless Exercise)
is delivered), the Company shall (X) provided that the Company’s transfer agent (“Transfer Agent”) is participating
in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program (“FAST”) and
the Warrant Shares are eligible to be issued without a restrictive legend, credit such aggregate number of Warrant Shares to which the
Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal
At Custodian system, or (Y) if the Transfer Agent is not participating in FAST or the Warrant Shares are not eligible to be issued without
a restrictive legend, issue and dispatch by overnight courier to the address as specified in the Exercise Notice, a certificate, registered
in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder
is entitled pursuant to such exercise. The Company shall be responsible for all fees and expenses of the Transfer Agent and all fees
and expenses with respect to the issuance of Warrant Shares via DTC, if any. Upon delivery of the Exercise Notice and the Aggregate Exercise
Price (or notice of a Cashless Exercise), the Holder shall be deemed for all corporate purposes to have become the holder of record of
the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares are credited to
the Holder’s DTC account or the date of delivery of the certificates evidencing such Warrant Shares, as the case may be. If this
Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this
Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise, then the Company shall as
soon as reasonably practicable and in no event later than three (3) Trading Days after any exercise and at its own expense, issue a new
Warrant (in accordance with Section 1(d)) representing the right to purchase the number of Warrant Shares issuable immediately prior
to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised upon surrender
of the Warrant so exercised. No fractional Warrant Shares are to be issued upon the exercise of this Warrant, but rather the number of
Warrant Shares to be issued shall be rounded down to the nearest whole number. The Company shall pay any and all transfer, stamp, issuance
and similar taxes (but not any United States federal, state or local income taxes) that may be payable with respect to the issuance and
delivery of Warrant Shares upon exercise of this Warrant. The Company’s obligations to issue and deliver Warrant Shares in accordance
with the terms and subject to the conditions hereof are absolute and unconditional, irrespective of any action or inaction by the Holder
to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any
action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination.
(b) Exercise
Price. For purposes of this Warrant, “Exercise Price” means $0.01, subject to adjustment as provided herein.
(c) Company’s
Failure to Timely Deliver Securities. If the Company shall fail, for any reason or for no reason, on or prior to the Share Delivery
Date, if the Transfer Agent is not participating in FAST or such shares of Common Stock may not be issued without legends under the Securities
Act, to issue and deliver to the Holder (or its designee) a certificate for the number of Warrant Shares to which the Holder is entitled
and register such Warrant Shares on the Company’s share register or, if the Transfer Agent is participating in FAST and such shares
of Common Stock may not be issued without legends under the Securities Act, to credit the balance account of the Holder or the Holder’s
designee with DTC for such number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise of this Warrant
(as the case may be) (a “Delivery Failure”), then, in addition to all other remedies available to the Holder, (X)
the Company shall pay in cash to the Holder on each day after the Share Delivery Date and during such Delivery Failure an amount in cash,
as liquidated damages and not as a penalty, equal to 2.0% of the product of (A) the sum of the number of shares of Common Stock not issued
to the Holder on or prior to the Share Delivery Date and to which the Holder is entitled, and (B) any trading price of the Common Stock
selected by the Holder in writing as in effect at any time during the period beginning on the applicable exercise date and ending on
the applicable Share Delivery Date, and (Y) the Holder, upon written notice to the Company, may void its Exercise Notice with respect
to, and retain or have returned, as the case may be, any portion of this Warrant that has not been exercised pursuant to such Exercise
Notice; provided that the voiding of an Exercise Notice shall not affect the Company’s obligations to make any payments which have
accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise. In addition to the foregoing, if on or after such
Share Delivery Date the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction
of a sale by the Holder of all or any portion of the number of shares of Common Stock issuable upon such exercise that the Holder is
entitled to receive from the Company (a “Buy-In”), then, in addition to all other remedies available to the Holder,
the Company shall, within three (3) Business Days after the Holder’s request and in the Holder’s discretion, either (i) pay
cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions and other out-of-pocket
expenses, if any) for the shares of Common Stock so purchased (including, without limitation, by any other Person in respect, or on behalf,
of the Holder) (the “Buy-In Price”), at which point the Company’s obligation to so issue and deliver such certificate
(and to issue such shares of Common Stock) or credit the balance account of such Holder or such Holder’s designee, as applicable,
with DTC for the number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise hereunder (as the case may
be) (and to issue such Warrant Shares) shall terminate, or (ii) promptly honor its obligation to so issue and deliver to the Holder a
certificate or certificates representing such Warrant Shares or credit the balance account of such Holder or such Holder’s designee,
as applicable, with DTC for the number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise hereunder (as
the case may be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such
number of Warrant Shares multiplied by (B) the Closing Sale Price of the Common Stock on the Share Delivery Date with respect to the
related Exercise Notice (the “Buy-In Payment Amount”). The Holder shall provide the Company written notice indicating
the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing
shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity, including, without
limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates
representing shares of Common Stock (or to electronically deliver such shares of Common Stock) upon the exercise of this Warrant as required
pursuant to the terms hereof.
(d) Cashless
Exercise. Notwithstanding anything contained herein to the contrary (other than Section 1(f) below), the Holder may, in its sole
discretion (and without limiting the Holder’s rights and remedies contained herein), exercise this Warrant in whole or in part
and, subject to the provisions of Section 1(a), in lieu of making the cash payment otherwise contemplated to be made to the Company upon
such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise the “Net Number” of
Warrant Shares determined according to the following formula:
Net Number = (A x B)
- (A x C)
B
For purposes of the foregoing
formula:
A= the total number of shares
with respect to which this Warrant is then being exercised.
B =
the quotient of (x) the sum of the VWAP of the Common Stock of each of the five (5) Trading Days ending at the close of business on the
Principal Market immediately prior to the time of exercise as set forth in the applicable Exercise Notice, divided by (y) five (5).
C =
the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.
For purposes
of Rule 144(d) promulgated under the Securities Act, as in effect on the date hereof, it is intended that the Warrant Shares issued in
a Cashless Exercise shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed
to have commenced, on the date this Warrant was originally issued pursuant to the Forbearance Agreement.
(e) Disputes.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the number of Warrant Shares
to be issued pursuant to the terms hereof, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed
and resolve such dispute in accordance with Section 12.
(f) Limitations
on Exercises. Notwithstanding anything to the contrary contained herein, the Company shall not effect the exercise of any portion
of this Warrant, and the Holder shall not have the right to exercise any portion of this Warrant, pursuant to the terms and conditions
of this Warrant and any such exercise shall be null and void and treated as if never made, to the extent that after giving effect to
such exercise, the Holder together with the other Attribution Parties collectively would beneficially own in excess of 4.99% (the “Maximum
Percentage”) of the number of shares of Common Stock outstanding immediately after giving effect to such exercise. For purposes
of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by the Holder and the other Attribution
Parties shall include the number of shares of Common Stock held by the Holder and all other Attribution Parties plus the number of shares
of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence is being made, but shall
exclude the number of shares of Common Stock which would be issuable upon (A) exercise of the remaining, unexercised portion of this
Warrant beneficially owned by the Holder or any of the other Attribution Parties and (B) exercise or conversion of the unexercised or
unconverted portion of any other securities of the Company (including, without limitation, any convertible notes or convertible preferred
stock or warrants) beneficially owned by the Holder or any other Attribution Party subject to a limitation on conversion or exercise
analogous to the limitation contained in this Section 1(f). For purposes of this Section 1(f), beneficial ownership shall be calculated
in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). For purposes
of this Warrant, in determining the number of outstanding shares of Common Stock the Holder may acquire upon the exercise of this Warrant
without exceeding the Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x)
the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public
filing with the Securities and Exchange Commission (the “SEC”), as the case may be, (y) a more recent public announcement
by the Company or (z) any other written notice by the Company or the Transfer Agent, if any, setting forth the number of shares of Common
Stock outstanding (the “Reported Outstanding Share Number”). If the Company receives an Exercise Notice from the Holder
at a time when the actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company
shall (i) notify the Holder in writing of the number of shares of Common Stock then outstanding and, to the extent that such Exercise
Notice would otherwise cause the Holder’s beneficial ownership, as determined pursuant to this Section 1(f), to exceed the Maximum
Percentage, the Holder must notify the Company of a reduced number of Warrant Shares to be purchased pursuant to such Exercise Notice
(the number of shares by which such purchase is reduced, the “Reduction Shares”) and (ii) as soon as reasonably practicable,
the Company shall return to the Holder any exercise price paid by the Holder for the Reduction Shares. For any reason at any time, upon
the written or oral request of the Holder, the Company shall within one (1) Business Day confirm orally and in writing or by electronic
mail to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock
shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder
and any other Attribution Party since the date as of which the Reported Outstanding Share Number was reported. In the event that the
issuance of shares of Common Stock to the Holder upon exercise of this Warrant results in the Holder and the other Attribution Parties
being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock
(as determined under Section 13(d) of the Exchange Act), the number of shares so issued by which the Holder’s and the other Attribution
Parties’ aggregate beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”) shall be deemed
null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer the Excess Shares. As
soon as reasonably practicable after the issuance of the Excess Shares has been deemed null and void, the Company shall return to the
Holder the exercise price paid by the Holder for the Excess Shares. Upon delivery of a written notice to the Company, the Holder may
from time to time increase (with such increase not effective until the sixty-first (61st) day after delivery of such notice) or decrease
the Maximum Percentage to any other percentage not in excess of 9.99% as specified in such notice; provided that (i) any such increase
in the Maximum Percentage will not be effective until the sixty-first (61st) day after such notice is delivered to the Company and (ii)
any such increase or decrease will apply only to the Holder and the other Attribution Parties and not to any other holder that is not
an Attribution Party of the Holder. For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this Warrant
in excess of the Maximum Percentage shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes
of Section 13(d) or Rule 16a-1(a)(1) of the Exchange Act. No prior inability to exercise this Warrant pursuant to this paragraph shall
have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of exercisability.
The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of
this Section 1(f) to the extent necessary to correct this paragraph or any portion of this paragraph which may be defective or inconsistent
with the intended beneficial ownership limitation contained in this Section 1(f) or to make changes or supplements necessary or desirable
to properly give effect to such limitation. The limitation contained in this paragraph may not be waived and shall apply to a successor
holder of this Warrant. Notwithstanding anything to the contrary contained herein, the Holder and the Company agree that the total number
of shares of Common Stock issuable pursuant to the terms of this Warrant and the other warrants issued in connection with the Forbearance
Agreement (together with this Warrant, the “Forbearance Warrants”), together with the total number of shares of Common
Stock issuable upon conversion of the Company’s Subordinated Convertible Notes (the “Notes”), sold by the Company
on the date hereof to certain investors (the “Buyers”), may not exceed the requirements of Nasdaq Listing Rule 5635(d)
(“Nasdaq 19.99% Cap”), except that such limitation will not apply following Approval (defined below). If the aggregate
number of shares of Common Stock issued to the holders of the Forbearance Warrants and the Notes reaches the Nasdaq 19.99% Cap, so as
not to violate the 20% limit established in Listing Rule 5635(d), the Company shall as soon as reasonably practicable take all action
necessary to obtain stockholder approval of the issuance of additional shares of Common Stock issuable upon the exercise of the Forbearance
Warrants and upon the conversion of the Notes, if necessary, in accordance with the requirements of Nasdaq Listing Rule 5635(d) (the
“Approval”). Without limiting the generality of the foregoing sentence, as soon as reasonably practicable after the
date of the application of the Nasdaq 19.99% Cap, but in no event later than seventy-five (75) days after such occurrence, the Company
shall hold a meeting of its stockholders to seek the Approval. In connection with such meeting, the Company shall provide each stockholder
with a proxy statement and shall use its reasonable best efforts to solicit the Approval and to cause its board of directors to recommend
to the stockholders that they provide the Approval. Until Approval is obtained, (i) increases to the Warrant Shares pursuant to Section
2(b) hereof and (ii) issuances of Common Stock pursuant to the conversion of the Notes shall be made between (x) the holders of the Forbearance
Warrants, and (y) the Buyers as nearly as possible on a pro rata basis based on the total amount of shares of Common Stock issued or
issuable to such party.
(g) Insufficient
Authorized Shares. If at any time while this Warrant remains outstanding the Company does not have a sufficient number of authorized
and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon exercise of this Warrant at least a number
of shares of Common Stock equal to the number of shares of Common Stock as shall from time to time be necessary to effect the exercise
of all of this Warrant then outstanding (the “Required Reserve Amount” and the failure to have such sufficient number
of authorized and unreserved shares of Common Stock, an “Authorized Share Failure”), then the Company shall as soon
as reasonably practicable take all action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient
to allow the Company to reserve the Required Reserve Amount for this Warrant then outstanding. Without limiting the generality of the
foregoing sentence, as soon as reasonably practicable after the date of the occurrence of an Authorized Share Failure, but in no event
later than seventy-five (75) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders
for the approval of an increase in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall
provide each stockholder with a proxy statement and shall use its reasonable best efforts to solicit its stockholders’ approval
of such increase in authorized shares of Common Stock and to cause its board of directors to recommend to the stockholders that they
approve such proposal. In the event that the Company is prohibited from issuing shares of Common Stock upon an exercise of this Warrant
due to the failure by the Company to have sufficient shares of Common Stock available out of the authorized but unissued shares of Common
Stock (such unavailable number of shares of Common Stock, the “Authorization Failure Shares”), in lieu of delivering
such Authorization Failure Shares to the Holder, the Company shall pay cash in exchange for the cancellation of such portion of this
Warrant exercisable into such Authorization Failure Shares at a price equal to the sum of (i) the product of (x) such number of Authorization
Failure Shares and (y) the Closing Sale Price of the Common Stock on the date the Holder delivers the applicable Exercise Notice with
respect to such Authorization Failure Shares to the Company; and (ii) to the extent the Holder purchases (in an open market transaction
or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of Authorization Failure Shares, any Buy-In Payment
Amount, brokerage commissions and other out-of-pocket expenses, if any, of the Holder incurred in connection therewith. Nothing contained
in this Section 1(g) shall limit any obligations of the Company under any provision of the Credit Agreement (as defined in the Forbearance
Agreement) or under any provision of the Forbearance Agreement.
2. ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and the number of Warrant Shares issuable upon exercise of this
Warrant are subject to adjustments from time to time as set forth in this Section 2.
(a) Adjustment
Upon Subdivision or Combination of Shares of Common Stock. If the Company at any time on or after the Issuance Date subdivides (by
any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a
greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the
number of Warrant Shares will be proportionately increased, so that after such adjustment the aggregate Exercise Price payable hereunder
for the adjusted number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment
(without regard to any limitations on exercise contained herein). If the Company at any time on or after the Issuance Date combines (by
combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of
shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased and the number of Warrant
Shares will be proportionately decreased, so that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted
number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment (without regard
to any limitations on exercise contained herein). Any adjustment under this Section 2(a) shall become effective at the close of business
on the date the subdivision or combination becomes effective. Corresponding adjustments shall be made to the Applicable Price (as defined
below).
(b) Adjustment
Upon Issuance of Shares of Common Stock. If and whenever on or after the Issuance Date but prior to December 31, 2024 (the
“Anti-Dilution Period”), the Company issues or sells, or in accordance with this Section 2 is deemed to have
issued or sold, any shares of Common Stock (including the issuance or sale of shares of Common Stock owned or held by or for the
account of the Company, but excluding Excluded Securities) for a consideration per share (the “New Issuance
Price”) less than $0.14 per share (the “Applicable Price”, and the foregoing a “Dilutive
Issuance”), then immediately after such Dilutive Issuance, the number of Warrant Shares shall be increased to an amount
equal to (x) the number of Warrant Shares prior to such Dilutive Issuance, multiplied by (y) the quotient of the Applicable Price
divided by the New Issuance Price. The Company and Holder acknowledge and agree that the Original Warrant had an Applicable Price of
$0.40 per share, the March 2024 Warrant had an Applicable Price of $0.25 per share and the amendment and restatement is as of a
result of a Dilutive Issuance with a $0.14 per share New Issuance Price. For all purposes of the foregoing (including, without
limitation, determining the adjusted number of Warrant Shares and the New Issuance Price under this Section 2(b)), the following
shall be applicable:
(i) Issuance
of Options. If, during the Anti-Dilution Period, the Company in any manner grants or sells any Options and the lowest price per share
for which one share of Common Stock is at any time issuable upon the exercise of any such Option or upon conversion, exercise or exchange
of any Convertible Securities issuable upon exercise of any such Option or otherwise pursuant to the terms thereof is less than the Applicable
Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time
of the granting or sale of such Option for such price per share. For purposes of this Section 2(b)(i), the “lowest price per share
for which one share of Common Stock is at any time issuable upon the exercise of any such Options or upon conversion, exercise or exchange
of any Convertible Securities issuable upon exercise of any such Option or otherwise pursuant to the terms thereof” shall be equal
to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to
any one share of Common Stock upon the granting or sale of such Option, upon exercise of such Option and upon conversion, exercise or
exchange of any Convertible Security issuable upon exercise of such Option or otherwise pursuant to the terms thereof and (y) the lowest
exercise price set forth in such Option for which one share of Common Stock is issuable (or may become issuable assuming all possible
market conditions) upon the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable
upon exercise of any such Option or otherwise pursuant to the terms thereof minus (2) the sum of all amounts paid or payable to the holder
of such Option (or any other Person) upon the granting or sale of such Option, upon exercise of such Option and upon conversion, exercise
or exchange of any Convertible Security issuable upon exercise of such Option or otherwise pursuant to the terms thereof plus the value
of any other consideration received or receivable by, or benefit conferred on, the holder of such Option (or any other Person). Except
as contemplated below, no further increase in the Warrant Shares shall be made upon the actual issuance of such shares of Common Stock
or of such Convertible Securities upon the exercise of such Options or otherwise pursuant to the terms of or upon the actual issuance
of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities.
(ii) Issuance
of Convertible Securities. If, during the Anti-Dilution Period, the Company in any manner issues or sells any Convertible Securities
and the lowest price per share for which one share of Common Stock is at any time issuable upon the conversion, exercise or exchange
thereof or otherwise pursuant to the terms thereof is less than the Applicable Price, then such share of Common Stock shall be deemed
to be outstanding and to have been issued and sold by the Company at the time of the issuance or sale of such Convertible Securities
for such price per share. For the purposes of this Section 2(b)(ii), the “lowest price per share for which one share of Common
Stock is at any time issuable upon the conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof” shall
be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect
to one share of Common Stock upon the issuance or sale of the Convertible Security and upon conversion, exercise or exchange of such
Convertible Security or otherwise pursuant to the terms thereof and (y) the lowest conversion price set forth in such Convertible Security
for which one share of Common Stock is issuable (or may become issuable assuming all possible market conditions) upon conversion, exercise
or exchange thereof or otherwise pursuant to the terms thereof minus (2) the sum of all amounts paid or payable to the holder of such
Convertible Security (or any other Person) upon the issuance or sale of such Convertible Security plus the value of any other consideration
received or receivable by, or benefit conferred on, the holder of such Convertible Security (or any other Person). Except as contemplated
below, no further increase of the Warrant Shares shall be made upon the actual issuance of such shares of Common Stock upon conversion,
exercise or exchange of such Convertible Securities or otherwise pursuant to the terms thereof, and if any such issuance or sale of such
Convertible Securities is made upon exercise of any Options for which adjustment of this Warrant has been or is to be made pursuant to
other provisions of this Section 2(b), except as contemplated below, no further increase of the Warrant Shares shall be made by reason
of such issuance or sale.
(iii) Change
in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the additional consideration,
if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time (other than
proportional changes in conversion or exercise prices, as applicable, in connection with an event referred to in Section 2(b)), the number
of Warrant Shares in effect at the time of such increase or decrease shall be increased to the number of Warrant Shares which would have
been in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase price, additional
consideration or increased or decreased conversion rate, as the case may be, at the time initially granted, issued or sold. For purposes
of this Section 2(b)(iii), if the terms of any Option or Convertible Security that was outstanding as of the Issuance Date are increased
or decreased in the manner described in the immediately preceding sentence, then such Option or Convertible Security and the shares of
Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such
increase or decrease. No adjustment pursuant to this Section 2(b) shall be made if such adjustment would result in a decrease of the
number of Warrant Shares.
(iv) Calculation
of Consideration Received. If any Option and/or Convertible Security and/or Adjustment Right is issued in connection with the issuance
or sale or deemed issuance or sale of any other securities of the Company (as determined by the Holder, the “Primary Security”,
and such Option and/or Convertible Security and/or Adjustment Right, the “Secondary Securities” and together with
the Primary Security, each a “Unit”), together comprising one integrated transaction (or one or more transactions
if such issuances or sales or deemed issuances or sales of securities of the Company either (A) have at least one investor or purchaser
in common, (B) are consummated in reasonable proximity to each other and/or (C) are consummated under the same plan of financing), the
aggregate consideration per share of Common Stock with respect to such Primary Security shall be deemed to be the lowest of (x) the purchase
price of such Unit, (y) if such Primary Security is an Option and/or Convertible Security, the lowest price per share for which one share
of Common Stock is at any time issuable upon the exercise or conversion of the Primary Security in accordance with Section 2(b)(i), 2(b)(ii)
or 2(b)(iii) above and (z) the quotient of (I) the sum of the three (3) lowest VWAPs of the Common Stock during the five (5) Trading
Day period immediately following the public announcement of such Dilutive Issuance, divided by (II) three (3) (for the avoidance of doubt,
if such public announcement is released prior to the opening of the Principal Market on a Trading Day, such Trading Day shall be the
first Trading Day in such five (5) Trading Day period). If any shares of Common Stock, Options or Convertible Securities are issued or
sold or deemed to have been issued or sold for cash, the consideration received therefor will be deemed to be the net amount of consideration
received by the Company therefor. If any shares of Common Stock, Options or Convertible Securities are issued or sold for a consideration
other than cash, the amount of such consideration received by the Company will be the fair value of such consideration, except where
such consideration consists of publicly traded securities, in which case the amount of consideration received by the Company for such
securities will be the arithmetic average of the VWAPs of such security for each of the five (5) Trading Days immediately preceding the
date of receipt. If any shares of Common Stock, Options or Convertible Securities are issued to the owners of the non-surviving entity
in connection with any merger in which the Company is the surviving entity, the amount of consideration therefor will be deemed to be
the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such shares of Common
Stock, Options or Convertible Securities (as the case may be). The fair value of any consideration other than cash or publicly traded
securities will be determined jointly by the Company and the Holder. If such parties are unable to reach agreement within 10 days after
the occurrence of an event requiring valuation (the “Valuation Event”), the fair value of such consideration will be determined
within five Trading Days after the 10th day following such Valuation Event by an independent, reputable appraiser jointly
selected by the Company and the Holder. The determination of such appraiser shall be final and binding upon all parties absent manifest
error and the fees and expenses of such appraiser shall be borne by the Company.
(v) Record
Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive a dividend
or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for or purchase shares
of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issuance or sale of the
shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution
or the date of the granting of such right of subscription or purchase (as the case may be).
(c) Par
Value. Notwithstanding anything to the contrary in this Warrant, in no event shall the Exercise Price be reduced below the par value
of the Company’s Common Stock.
(d) Voluntary
Adjustment by Company. Subject to Section 2(c), the Company may at any time during the term of this Warrant, with prior written notice
to the Holder, reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors
of the Company.
3. RIGHTS
UPON DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 2 above, if the Company shall declare or make any
dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return
of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property, options, evidence
of indebtedness or any other assets by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement
or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such
case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein
if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any
limitations or restrictions on exercise of this Warrant, including without limitation, the Maximum Percentage) immediately before the
date on which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the participation in such Distribution (provided, however, that to the extent that the Holder’s
right to participate in any such Distribution would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage,
then the Holder shall not be entitled to participate in such Distribution to the extent of the Maximum Percentage (and shall not be entitled
to beneficial ownership of such shares of Common Stock as a result of such Distribution (and beneficial ownership) to the extent of any
such excess) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time or times, if
ever, as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which
time or times the Holder shall be granted such Distribution (and any Distributions declared or made on such initial Distribution or on
any subsequent Distribution held similarly in abeyance) to the same extent as if there had been no such limitation).
4. PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS.
(a) Purchase
Rights. In addition to any adjustments pursuant to Section 2 above, if at any time the Company grants, issues or sells any Options,
Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class
of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to
such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares
of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations or restrictions on exercise of this
Warrant, including without limitation, the Maximum Percentage) immediately before the date on which a record is taken for the grant,
issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common
Stock are to be determined for the grant, issuance or sale of such Purchase Rights (provided, however, that to the extent that the Holder’s
right to participate in any such Purchase Right would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage,
then the Holder shall not be entitled to participate in such Purchase Right to the extent of the Maximum Percentage (and shall not be
entitled to beneficial ownership of such shares of Common Stock as a result of such Purchase Right (and beneficial ownership) to the
extent of any such excess) and such Purchase Right to such extent shall be held in abeyance for the benefit of the Holder until such
time or times, if ever, as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage,
at which time or times the Holder shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase
Right or on any subsequent Purchase Right held similarly in abeyance) to the same extent as if there had been no such limitation).
(b) Fundamental
Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless:
(i) in
the event that the Successor Entity (including its Parent Entity) is not a publicly traded entity with common equity quoted on or listed
for trading on an Eligible Market and registered under the Exchange Act, the Company or the Successor Entity, as applicable, shall, on
or prior to the date of consummation of such Fundamental Transaction, purchase this Warrant from the Holder by paying to the Holder cash
in an amount equal to the Black Scholes Going Private Value (without regard to the limitation set forth in Section 1(f)) whereupon the
Successor Entity shall have no obligation to assume the obligations of the Company under this Warrant and the other Loan Documents, including
any obligation to deliver to the Holder in exchange for this Warrant any security of the Successor Entity, and
(ii) in
the event that the Successor Entity (including its Parent Entity) is a publicly traded entity with common equity quoted on or listed
for trading on an Eligible Market and registered under the Exchange Act, the Successor Entity assumes in writing all of the obligations
of the Company under this Warrant and the other Loan Documents in accordance with the provisions of this Section 4(b)(ii) pursuant to
written agreements in form and substance satisfactory to the Holder and approved by the Holder prior to such Fundamental Transaction,
including agreements to deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written
instrument substantially similar in form and substance to this Warrant, including, without limitation, which is exercisable for a corresponding
number of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without
regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies
the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock
pursuant to such Fundamental Transaction and the value of such shares of capital stock, such adjustments to the number of shares of capital
stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation
of such Fundamental Transaction). Upon the consummation of each Fundamental Transaction described in this Section 4(b)(ii) (each such
Fundamental Transaction, a “Public Fundamental Transaction”), the Successor Entity shall (x) succeed to, and be substituted
for (so that from and after the date of the applicable Public Fundamental Transaction, the provisions of this Warrant and the other Loan
Documents referring to the “Company” or the “Borrower” shall refer instead to the Successor Entity), and may
exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other
Loan Documents with the same effect as if such Successor Entity had been named as the Company herein or therein, and (y) deliver to the
Holder confirmation that there shall be issued upon exercise of this Warrant at any time after the consummation of the applicable Public
Fundamental Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets or other property (except such items
still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of this
Warrant prior to the applicable Public Fundamental Transaction, such shares of publicly traded common stock (or its equivalent) of the
Successor Entity (including its Parent Entity) which the Holder would have been entitled to receive upon the happening of the applicable
Public Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Public Fundamental Transaction (without
regard to any limitations on the exercise of this Warrant), as adjusted in accordance with the provisions of this Warrant. Notwithstanding
the foregoing, and without limiting Section 1(f) hereof, the Holder may elect, at its sole option, by delivery of written notice to the
Company to waive this Section 4(b)(ii) to permit the Public Fundamental Transaction without the assumption of this Warrant.
In addition to and not
in substitution for any other rights hereunder, prior to the consummation of each Fundamental Transaction pursuant to which holders of
shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Common Stock (a
“Corporate Event”), the Company shall make appropriate provision to insure that the Holder will thereafter have the
right to receive upon an exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction but prior
to the Expiration Date, in lieu of the shares of the Common Stock (or other securities, cash, assets or other property (except such items
still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of the
Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever (including
warrants or other purchase or subscription rights) which the Holder would have been entitled to receive upon the happening of the applicable
Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to
any limitations on the exercise of this Warrant). Provision made pursuant to the preceding sentence shall be in a form and substance
reasonably satisfactory to the Holder.
(c) Holder
Optional Redemptions. Notwithstanding the foregoing and the provisions of Section 4(b)(ii) above, at the request of the Holder delivered
at any time commencing on the earliest to occur of (x) the public disclosure of any Public Fundamental Transaction, (y) the consummation
of any Public Fundamental Transaction and (z) the Holder first becoming aware of any Public Fundamental Transaction through the date
that is ninety (90) days after the public disclosure of the consummation of such Public Fundamental Transaction by the Company pursuant
to a Current Report on Form 8-K filed with the SEC, the Company or the Successor Entity (as the case may be) shall purchase this Warrant
from the Holder on the date of such request by paying to the Holder cash in an amount equal to the Black Scholes Value. Payment of such
amounts shall be made by the Company (or at the Company’s direction) to the Holder on or prior to the later of (x) the second (2nd)
Trading Day after the date of such request and (y) the date of consummation of such Public Fundamental Transaction.
(d) Application.
The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions and Corporate Events and shall
be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without regard to any limitations on the
exercise of this Warrant (provided that the Holder shall continue to be entitled to the benefit of the Maximum Percentage, applied however
with respect to shares of capital stock registered under the Exchange Act and thereafter receivable upon exercise of this Warrant (or
any such other warrant)).
5. NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation or Bylaws, or through
any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance or sale of securities, or
any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all
times in good faith carry out all of the provisions of this Warrant and take all action as may be required to protect the rights of the
Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all such actions as may be necessary
or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the proper
exercise of this Warrant by the Holder, and (iii) shall, so long as this Warrant is outstanding, take all action necessary to reserve
and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose of effecting the exercise of this
Warrant, the number of shares of Common Stock as shall from time to time be necessary to effect the exercise of this Warrant (without
regard to any limitations on exercise). Notwithstanding anything herein to the contrary, if after the sixty (60) calendar day anniversary
of the Issuance Date, the Holder is not permitted to exercise this Warrant in full for any reason (other than pursuant to restrictions
set forth in Section 1(f) hereof), the Company shall use its reasonable best efforts to promptly remedy such failure, including, without
limitation, obtaining such consents or approvals as necessary to permit such exercise into shares of Common Stock.
6. WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in such Person’s capacity
as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company
for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in such Person’s capacity
as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any
corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise),
receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant
Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant
shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise)
or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding
this Section 6, the Company shall provide the Holder with copies of the same notices and other information given to the stockholders
of the Company generally, contemporaneously with the giving thereof to the stockholders.
7. REISSUANCE
OF WARRANTS.
(a) Transfer
of Warrant. If this Warrant is to be transferred and reissued to the transferee, the Holder shall surrender this Warrant to the Company
together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent
or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer, whereupon the Company will forthwith
issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as the Holder may request,
representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less than the total number of
Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 7(d)) to the Holder representing
the right to purchase the number of Warrant Shares not being transferred. For the avoidance of doubt, this Section 7(a) will not apply
to a sale, transfer, pledge or assignment of this Warrant that does not involve a reissuance of this Warrant.
(b) Lost,
Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant (as to which a written certification and the indemnification contemplated below shall suffice as such evidence),
and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary and reasonable
form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder
a new Warrant (in accordance with Section 7(d)) representing the right to purchase the Warrant Shares then underlying this Warrant.
(c) Exchangeable
for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company,
for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the number of Warrant
Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of such Warrant Shares
as is designated by the Holder at the time of such surrender; provided, however, that no warrants for fractional shares
of Common Stock shall be given.
(d) Issuance
of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant
(i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to purchase
the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a) or Section 7(c),
the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying the other new Warrants
issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant), (iii) shall have
an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date, and (iv) shall have the same rights
and conditions as this Warrant.
8. NOTICES
OF CHANGES IN WARRANT. Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice
shall be given in accordance with Section 8.2 of the Credit Agreement. Upon every adjustment of the Exercise Price or the number of shares
of Common Stock issuable upon exercise of a Warrant, the Company shall give written notice thereof to the Holders, which notice shall
state the Exercise Price resulting from such adjustment and the increase or decrease, if any, in the number of Warrant Shares purchasable
at such price upon the exercise of a Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such
calculation is based.
9. AMENDMENT
AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant may be amended or waived and the Company may take
any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the
written consent of (i) the Holder, if there is one Holder, or (ii) the Holder or Holders of the Warrant or Warrants representing the
majority of Warrant Shares if there is more than one Holder, and with respect to any amendment, the amendment is in writing and signed
by the Company and the Holder.
10. GOVERNING
LAW; JURISDICTION; JURY TRIAL. This Warrant shall be governed by and construed and enforced in accordance with, and all
questions concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal
laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of
New York. The Company and the Holder each hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts
sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or
with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or
proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. The Company and the
Holder each hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to the Company or such Holder, as applicable at the address set forth in Section 8.2 of the
Credit Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained
herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Company in any
other jurisdiction to collect on the Company’s obligations to the Holder, to realize on any collateral or any other security
for such obligations, or to enforce a judgment or other court ruling in favor of the Holder. THE COMPANY HEREBY AND THE HOLDER
EACH IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.
11. CONSTRUCTION;
HEADINGS; BUSINESS DAYS. This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed
against any Person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or
affect the interpretation of, this Warrant. If the last or appointed day for the taking of any action or the expiration of any right
required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding
Business Day.
12. DISPUTE
RESOLUTION. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares,
the Company shall submit the disputed determinations or arithmetic calculations via facsimile or electronic mail within two (2) Business
Days of receipt of the Exercise Notice giving rise to such dispute, as the case may be, to the Holder. If the Holder and the Company
are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within three (3) Business Days
of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall, within two (2) Business
Days submit via facsimile or electronic mail the dispute to a nationally recognized accounting firm selected by the Holder and reasonably
satisfactory to the Company. If the Company does not object in writing to the selection of the accounting firm within two (2) Business
Days of notice of the Holder’s selection, the Company will have deemed to have consented to such selection. If the Company does
object, the Company shall provide the Holder its rationale for such rejection and five (5) acceptable alternative firms. The Company
shall cause at its expense the accepted accounting firm to perform the determinations or calculations and notify the Company and the
Holder of the results no later than three (3) Business Days from the time it receives the disputed determinations or calculations. Such
accounting firm’s determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error.
In the event that the accounting firm resolves the dispute in the Holder’s favor, a Delivery Failure will be deemed to have occurred
and the Buy-In and other remedies available to the Holder under Section 1(c) will apply.
13. REMEDIES,
OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition to all
other remedies available under this Warrant and the other Loan Documents, at law or in equity (including a decree of specific performance
and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual damages for any failure by the
Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in
the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an injunction
restraining any breach, without the necessity of showing economic loss and without any bond or other security being required.
14. TRANSFER.
This Warrant and the Warrant Shares may be offered for sale, sold, transferred, pledged or assigned without the consent of the Company,
subject to compliance with applicable state and federal securities laws. The Holder acknowledges that the Warrant Shares acquired upon
the exercise of this Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale
imposed by state and federal securities laws.
15. SEVERABILITY.
If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest
extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity
of the remaining provisions of this Warrant so long as this Warrant as so modified continues to express, without material change, the
original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s)
in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization
of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the
prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of
the prohibited, invalid or unenforceable provision(s).
16. NO
DISCLOSURE. The Company shall not provide material, non-public information or confidential or proprietary information to the Holder
without such Holder’s written consent.
17. REPRESENTATIONS
OF HOLDERS.
(a) Investment
Intent. Each Holder represents and warrants that it is acquiring this Warrant and the Warrant Shares (collectively, the “Securities”),
solely for its beneficial account, for investment purposes, and not with a view to, or for resale in connection with, any distribution
of the Securities in violation of applicable securities laws.
(b) Unregistered
Securities. Each Holder represents and warrants that it understands that the Securities have not been registered under the Securities
Act or any state securities laws by reason of specific exemptions under the provisions thereof, the availability of which depend in part
upon the bona fide nature of its investment intent and upon the accuracy of its representations made herein.
(c) Reliance.
Each Holder represents and warrants that it understands that the Company is relying in part upon the representations and agreements of
the Holders contained herein for the purpose of determining whether the offer, sale and issuance of the Securities meet the requirements
for such exemptions described in Section 17(b).
(d) Accredited
Investor. Each Holder represents and warrants that it is an “accredited investor” as defined in Rule 501(a) under the
Securities Act.
(e) Sophisticated
Investor. Each Holder represents and warrants that it has such knowledge, skill and experience in business, financial and investment
matters that it is capable of evaluating the merits and risks of an investment in the Securities, including experience in and knowledge
of the industry in which the Company operates.
(f) Restricted
Securities. Each Holder represents and warrants that it understand that the Securities will be “restricted securities”
under applicable federal securities laws and that the Securities Act and the rules of the SEC provide in substance that it may dispose
of the Securities only pursuant to an effective registration statement under the Securities Act or an exemption therefrom.
(g) Information.
Each Holder represents and warrants that it has been furnished by the Company all information (or provided access to all information)
regarding the business and financial condition of the Company, the attributes of the Securities, and the merits and risks of an investment
in such Securities which it has requested or otherwise needs to evaluate the investment in such Securities; that in making the proposed
investment decision, such Holder is relying solely on such information, the representations, warranties and agreements of the Company
and the other Loan Parties contained herein and in the other Loan Documents and on investigations made by it and its representatives;
that the offer to sell the Securities hereunder was communicated to such Holder in such a manner that it was able to ask questions of
and receive answers from the management of the Company concerning the terms and conditions of the proposed transaction and that at no
time was it presented with or solicited by or through any leaflet, public promotional meeting, television advertisement or any other
form of general or public advertising or solicitation; and such Holder recognizes that an investment in the Securities involves risks
and can result in a total loss of all funds invested.
(h) Non-Reliance.
Notwithstanding anything in this Warrant to the contrary, each Holder hereby acknowledges, with respect to itself, that the Company may
possess material non-public information with respect to the Company and/or its securities not known to each Holder as of the date hereof
or at a time when each Holder exercises its right to purchase Warrant Shares pursuant to this Warrant and that any such information may
impact the value of the Warrant and the Warrant Shares. Each Holder with respect to itself irrevocably waives any claim, or potential
claim, that it may have based on the failure of the Company or its Affiliates, officers, directors, employees, agents or other representatives
to disclose such information in connection with the execution and delivery of this Warrant or the purchase of Warrant Shares hereunder;
provided, however,
notwithstanding anything in this Section 17(h) or otherwise to the contrary, each Holder does not and shall not be deemed to have waived
or otherwise compromised any rights or claims based upon or arising out of (i) the Company’s disclosure obligations under the federal
securities laws with respect to any untrue statement of a material fact or omission to state a material fact necessary in order to make
the statements made, in the light of the circumstances under which they were made, not misleading in any public statement or filing made
by the Company pursuant to the Exchange Act, or (ii) any breach or inaccuracy of any representation or warranty of the Company or any
other Loan Party in the Credit Agreement, the Forbearance Agreement or any other Loan Document. Each Holder with respect to itself acknowledges
that the Company would not enter into this Warrant in the absence of the agreements set forth in this Section 17.
18.
REPRESENTATIONS OF THE COMPANY. The Company represents and warrants to the Holder that, except as set forth in the SEC Reports
(as defined below):
(a) The
Company (i) is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation; (ii) has the
requisite power and authority to own, lease and operate its properties, to carry on its business as it is now being conducted and to
enter into, deliver and perform its obligations under this Warrant; and (iii) is duly licensed or qualified to conduct its business and,
if applicable, is in good standing under the laws of each jurisdiction (other than its jurisdiction of incorporation) in which the conduct
of its business or the ownership of its properties or assets requires such license or qualification, except, with respect to the foregoing
clause (iii), where the failure to be in good standing would not reasonably be expected to have a Company Material Adverse Effect. For
purposes of this Warrant, a “Company Material Adverse Effect” means an event, change, development, occurrence, condition
or effect with respect to the Company and its subsidiaries, taken together as a whole (on a consolidated basis), that, individually or
in the aggregate, (A) would reasonably be expected to have a material adverse effect on the business, financial condition or results
of operations of the Company and its subsidiaries, taken together as a whole (on a consolidated basis) or (B) would prevent, materially
delay or materially impede the performance by the Company or its subsidiaries of their respective obligations under this Warrant or the
other Loan Documents.
(b) This
Warrant is duly authorized, validly issued and constitutes legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with its terms, except that the enforcement thereof may be subject to applicable bankruptcy, insolvency or similar
laws affecting creditors’ rights generally or by equitable principles relating to enforceability (collectively, the “Enforceability
Exceptions”), and has not been issued in violation of any preemptive rights created under the Company’s organizational
documents or the laws of the State of Delaware.
(c) The
Warrant Shares have been duly authorized and, when issued and delivered to the Holder upon conversion of this Warrant, will be validly
issued, fully paid and nonassessable and will not have been issued in violation of any preemptive rights created under the Company’s
organizational documents or the laws of the State of Delaware.
(d) The
execution and delivery of this Warrant, the issuance and delivery of the Warrant Shares in accordance with the terms hereof and the compliance
by the Company with all of the provisions of this Warrant and the consummation of the transactions contemplated herein will not conflict
with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any of the property or assets of the Company pursuant to the terms of (i) any indenture,
mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which the Company is a party or by which
the Company is bound or to which any of the property or assets of the Company is subject; (ii) the organizational documents of the Company;
or (iii) any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having
jurisdiction over the Company or any of its properties that, in the case of clauses (i) and (iii), would reasonably be expected to have
a Company Material Adverse Effect or have a material adverse effect on the Company’s ability to consummate the transactions contemplated
hereby.
(e) Assuming
the accuracy of the representations and warranties of the Holder, the Company is not required to obtain any consent, waiver, authorization
or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental
authority, self-regulatory organization (including the Nasdaq Stock Market) or other person in connection with the execution, delivery
and performance of this Warrant, other than (i) filings required by applicable state securities laws, (ii) the filing of the registration
statement pursuant to the First Amendment Registration Rights Agreement, (iii) the filing of a Notice of Exempt Offering of Securities
on Form D with the SEC, if applicable and (iv) those the failure of which to obtain would not be reasonably likely to have a Company
Material Adverse Effect or have a material adverse effect on the Company’s ability to consummate the transactions contemplated
hereby.
(f) The
Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities
Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such
shorter period as the Company was required by law or 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”)
on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration
of any such extension. The Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023 (the “2023 Form
10-K”) complies in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and
the 2023 Form 10-K does 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 the light of the circumstances under which they were made, not misleading. The
financial statements of the Company 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. Such financial statements have been prepared in all material respects
in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“
GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except
that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial
position of the Company 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 normal, immaterial, year-end audit adjustments.
(g) Except
for such matters as have not had and would not be reasonably likely to have a Company Material Adverse Effect or have a material adverse
effect on the Company’s ability to consummate the transactions contemplated hereby, there is no (i) suit, action, investigation,
proceeding or arbitration before a governmental authority or arbitrator pending, or, to the knowledge of the Company, threatened in writing
against the Company or any of its directors or officers in their capacities as such or (ii) judgment, decree, injunction, ruling or order
of any governmental authority or arbitrator outstanding against the Company or any of its directors or officers in their capacities as
such.
(h) Except
for such matters as have not had and would not be reasonably likely to have a Company Material Adverse Effect or have a material adverse
effect on the Company’s ability to consummate the transactions contemplated hereby, the Company is, and has been since its inception,
in compliance with all laws applicable to the conduct of the business of the Company. The Company has not received any written, or to
its knowledge, other communication from a governmental entity that alleges that the Company is not in compliance with or is in default
or violation of any applicable law, except where such noncompliance, default or violation would not be reasonably expected to have, individually
or in the aggregate, a Company Material Adverse Effect.
(i) The
Company has all franchises, permits, licenses and any similar authority necessary for the conduct of its business as now being conducted
by it, the lack of which would have a material adverse effect, and to the Company’s knowledge, the Company is not in default in
any material respect under any of such franchises, permits, licenses or other authority.
(j) There
is no action, suit, proceeding or investigation pending or, to the Company’s knowledge, currently threatened in writing against
the Company that questions the validity of this Warrant or the right of the Company to enter into this Warrant, or to consummate the
transactions contemplated hereby, or that might result, if determined adversely to the Company, in a material adverse effect, or in any
material change in the current equity ownership of the Company.
(k) To
the Company’s knowledge, the Company owns or possesses sufficient legal rights to all (a) patents, patent applications and inventions;
(b) trademarks, service marks, trade names, trade dress, logos, domain names or corporate names and registrations and applications for
registration thereof, together with all of the goodwill associated therewith; (c) copyrights (registered or unregistered) and copyrightable
works and registrations and applications for registrations thereof; (d) computer software, data, and databases and documentation thereof;
(e) trade secrets and other confidential information; and (f) licenses, information and proprietary rights and processes necessary for
its business as now conducted. The Company has not received any written communications alleging that the Company has violated or, by
conducting its business as proposed, would violate any of the patents, trademarks, service marks, trade names, copyrights or trade secrets
or other proprietary rights of any other person or entity.
19. CERTAIN
DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:
(a) “Adjustment
Right” means any right granted with respect to any securities issued in connection with, or with respect to, any issuance or
sale (or deemed issuance or sale in accordance with Section 2) of shares of Common Stock (other than rights of the type described in
Section 3 and 4 hereof) that could result in a decrease in the net consideration received by the Company in connection with, or with
respect to, such securities (including, without limitation, any cash settlement rights, cash adjustment or other similar rights).
(b) “Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
(c) “Approved
Stock Plan” means any employee benefit plan which has been approved by the board of directors of the Company prior to or subsequent
to the date hereof pursuant to which shares of Common Stock and standard options to purchase Common Stock may be issued to any employee,
officer or director for services provided to the Company in their capacity as such.
(d) “Attribution
Parties” means, collectively, the following Persons and entities: (i) any investment vehicle, including, any funds, feeder
funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed or advised by the
Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the Holder or any
of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or any of the foregoing
and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock would or could be aggregated with the Holder’s
and the other Attribution Parties for purposes of Section 13(d) of the Exchange Act. For clarity, the purpose of the foregoing is to
subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.
(e) “Black
Scholes Going Private Value” means the value of the unexercised portion of this Warrant remaining on the date of the consummation
of the Fundamental Transaction referred to in Section 4(b)(i), which value is calculated using the Black Scholes Option Pricing Model
obtained from the “OV” function on Bloomberg utilizing (i) an underlying price per share equal to the greater of (1) the
highest Closing Sale Price of the Common Stock during the period beginning on the Trading Day immediately preceding the announcement
of the applicable Fundamental Transaction (or the consummation of the applicable Fundamental Transaction, if earlier) and ending on the
date of consummation of the applicable Fundamental Transaction and (2) the sum of the price per share being offered in cash in the applicable
Fundamental Transaction (if any) plus the value of the non-cash consideration being offered in the applicable Fundamental Transaction
(if any), (ii) a strike price equal to the Exercise Price in effect on the date of consummation of the applicable Fundamental Transaction,
(iii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the greater of (1) the remaining term of
this Warrant as of the date of consummation of the applicable Fundamental Transaction and (2) the remaining term of this Warrant as of
the date of consummation of the applicable Fundamental Transaction, (iv) a zero cost of borrow and (v) an expected volatility equal to
the greater of 100% and the 60 day volatility obtained from the “HVT” function on Bloomberg (determined utilizing a 365 day
annualization factor) as of the Trading Day immediately following the earliest to occur of (A) the public disclosure of the applicable
Fundamental Transaction, and (B) the consummation of the applicable Fundamental Transaction.
(f) “Black
Scholes Value” means the value of the unexercised portion of this Warrant remaining on the date of the Holder’s request
pursuant to Section 4(c), which value is calculated using the Black Scholes Option Pricing Model obtained from the “OV” function
on Bloomberg utilizing (i) an underlying price per share equal to the greater of (1) the highest Closing Sale Price of the Common Stock
during the period beginning on the Trading Day immediately preceding the announcement of the applicable Fundamental Transaction (or the
consummation of the applicable Fundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant
to Section 4(c) and (2) the sum of the price per share being offered in cash in the applicable Fundamental Transaction (if any) plus
the value of the non-cash consideration being offered in the applicable Fundamental Transaction (if any), (ii) a strike price equal to
the Exercise Price in effect on the date of the Holder’s request pursuant to Section 4(c), (iii) a risk-free interest rate corresponding
to the U.S. Treasury rate for a period equal to the greater of (1) the remaining term of this Warrant as of the date of the Holder’s
request pursuant to Section 4(c) and (2) the remaining term of this Warrant as of the date of consummation of the applicable Fundamental
Transaction or as of the date of the Holder’s request pursuant to Section 4(c) if such request is prior to the date of the consummation
of the applicable Fundamental Transaction, (iv) a zero cost of borrow and (v) an expected volatility equal to the greater of 100% and
the 60 day volatility obtained from the “HVT” function on Bloomberg (determined utilizing a 365 day annualization factor)
as of the Trading Day immediately following the earliest to occur of (A) the public disclosure of the applicable Fundamental Transaction,
(B) the consummation of the applicable Fundamental Transaction and (C) the date on which the Holder first became aware of the applicable
Fundamental Transaction.
(g) “Bloomberg”
means Bloomberg, L.P.
(h) “Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day
on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.
(i) “Closing
Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing bid price and
last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market
begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as the case may
be, then the last bid price or the last trade price, respectively, of such security prior to 4:00:00 p.m., New York time, as reported
by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last closing
bid price or last trade price, respectively, of such security on the principal securities exchange or trading market where such security
is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price, respectively,
of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no
closing bid price or last trade price, respectively, is reported for such security by Bloomberg, the average of the bid prices, or the
ask prices, respectively, of any market makers for such security as reported in the OTC Link or “pink sheets” by OTC Markets
Group Inc. (formerly Pink OTC Markets Inc.). If the Closing Bid Price or the Closing Sale Price cannot be calculated for a security on
a particular date on any of the foregoing bases, the Closing Bid Price or the Closing Sale Price, as the case may be, of such security
on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable
to agree upon the fair market value of such security, then such dispute shall be resolved pursuant to Section 12. All such determinations
to be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or other similar transaction during
the applicable calculation period.
(j) “Common
Stock” means (i) the Company’s shares of common stock, par value $0.0001 per share, and (ii) any share capital into which
such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.
(k) “Convertible
Securities” means any stock or securities (other than Options) directly or indirectly convertible into or exercisable or exchangeable
for shares of Common Stock.
(l) “Eligible
Market” means The Nasdaq Capital Market, The Nasdaq Global Select Market, The Nasdaq Global Market, the NYSE American, or The
New York Stock Exchange.
(m) “Excluded
Securities” means, without duplication, (i) shares of Common Stock or standard options to purchase Common Stock issued to directors,
officers or employees of the Company for services rendered to the Company in their capacity as such pursuant to an Approved Stock Plan,
provided that the exercise price of any such options is not lowered, none of such options are amended to increase the number of shares
issuable thereunder and none of the terms or conditions of any such options are otherwise materially changed in any manner that adversely
affects any of the holders of this Warrant; (ii) shares of Common Stock issued upon the conversion or exercise of Convertible Securities
(other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above)
outstanding prior to the Issuance Date, provided that the conversion price of any such Convertible Securities (other than standard options
to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) is not lowered, none of such
Convertible Securities (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered
by clause (i) above) are amended to increase the number of shares issuable thereunder and none of the terms or conditions of any such
Convertible Securities (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered
by clause (i) above) are otherwise materially changed in any manner that adversely affects any of the Holders; and (iii) the shares of
Common Stock issuable upon exercise of (A) warrants to purchase 400,000 shares of Common Stock, with an exercise price of $0.01 per share,
issued to Metropolitan Levered Partners Fund VII, LP, Metropolitan Partners Fund VII, LP, Metropolitan Offshore Partners Fund VII, LP
and CEOF Holdings LP (the “Metropolitan Entities”), (B) warrants to purchase 500,000 shares of Common Stock, with
an exercise price of $0.01 per share, issued to the Metropolitan Entities, (C) warrants to purchase 2,000,000 shares of Common Stock,
with an exercise price of $0.01 per share, issued to the Metropolitan Entities, (D) warrants to purchase 25,000 shares of Common Stock,
with an exercise price of $0.01 per share, issued to Metropolitan Levered Partners Fund VII, LP, Metropolitan Partners Fund VII, LP,
Metropolitan Offshore Partners Fund VII, LP and CEOF Holdings LP, (E) any warrant issued to the Metropolitan Entities in connection with
the Third Amendment and (F) this Warrant and any other warrant issued to the Metropolitan Entities in connection with the Forbearance
Agreement.
(n) “Expiration
Date” means the date that is the five (5) year anniversary of the Issuance Date or, if such date falls on a day other than
a Trading Day or on which trading does not take place on the Principal Market (a “Holiday”), the next date that is
not a Holiday.
(o) “Fundamental
Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise,
in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation)
another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or
assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation S-X) to one or more
Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject to or have its Common
Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange offer that is accepted by the holders
of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of Common Stock calculated as
if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated with any Subject Entities making or party
to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares of Common Stock such that all Subject
Entities making or party to, or Affiliated with any Subject Entity making or party to, such purchase, tender or exchange offer, become
collectively the beneficial owners (as defined in Rule 13d-3 under the Exchange Act) of at least 50% of the outstanding shares of Common
Stock, or (iv) consummate a stock purchase agreement or other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with one or more Subject Entities whereby all such Subject Entities, individually
or in the aggregate, acquire, either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding
shares of Common Stock calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated
with any Subject Entity making or party to, such stock purchase agreement or other business combination were not outstanding; or (z)
such number of shares of Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3
under the Exchange Act) of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its
Common Stock, (B) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or
more related transactions, allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, whether through acquisition, purchase, assignment,
conveyance, tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination,
reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise
in any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common
Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock not held by all such
Subject Entities as of the date of this Warrant calculated as if any shares of Common Stock held by all such Subject Entities were not
outstanding, or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock
or other equity securities of the Company sufficient to allow such Subject Entities to effect a statutory short form merger or other
transaction requiring other stockholders of the Company to surrender their shares of Common Stock without approval of the stockholders
of the Company or (C) directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions,
the issuance of or the entering into any other instrument or transaction structured in a manner to circumvent, or that circumvents, the
intent of this definition in which case this definition shall be construed and implemented in a manner otherwise than in strict conformity
with the terms of this definition to the extent necessary to correct this definition or any portion of this definition which may be defective
or inconsistent with the intended treatment of such instrument or transaction.
(p) “Group”
means a “group” as that term is used in Section 13(d) of the Exchange Act and as defined in Rule 13d-5 thereunder.
(q) “Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
(r) “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person, including such entity whose
common shares or common stock or equivalent equity security is quoted or listed on an Eligible Market (or, if so elected by the Holder,
any other market, exchange or quotation system), or, if there is more than one such Person or such entity, the Person or such entity
designated by the Holder or in the absence of such designation, such Person or entity with the largest public market capitalization as
of the date of consummation of the Fundamental Transaction.
(s) “Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
(t) “Principal
Market” means the OTC Bulletin Board or any other Eligible Market, or any national securities exchange, market or trading or
quotation facility on which the Common Stock is then listed or quoted.
(u) “Securities
Act” means the Securities Act of 1933, as amended.
(v) “Subject
Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
(w) “Successor
Entity” means one or more Person or Persons (or, if so elected by the Holder, the Company or Parent Entity) formed by, resulting
from or surviving any Fundamental Transaction or one or more Person or Persons (or, if so elected by the Holder, the Company or the Parent
Entity) with which such Fundamental Transaction shall have been entered into.
(x) “Trading
Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal
trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then
traded; provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such
exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading
on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange
or market, then during the hour ending at 4:00:00 p.m., New York time).
(y) “VWAP”
means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market during the
period beginning at 9:30:01 a.m., New York time (or such other time as the Principal Market publicly announces is the official open of
trading), and ending at 4:00:00 p.m., New York time (or such other time as the Principal Market publicly announces is the official close
of trading), as reported by Bloomberg through its “Volume at Price” function or, if the foregoing does not apply, the dollar
volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during
the period beginning at 9:30:01 a.m., New York time (or such other time as such market publicly announces is the official open of trading),
and ending at 4:00:00 p.m., New York time (or such other time as such market publicly announces is the official close of trading), as
reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the
average of the highest Closing Bid Price and the lowest closing ask price of any of the market makers for such security as reported in
the OTC Link or “pink sheets” by OTC Markets Group Inc. (formerly Pink OTC Markets Inc.). If the VWAP cannot be calculated
for a security on a particular date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value
as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of
such security, then such dispute shall be resolved pursuant to Section 12 with the term “VWAP” being substituted for the
term “Exercise Price.” All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock
combination, reclassification or other similar transaction during the applicable calculation period.
[Signature Page Follows]
IN WITNESS WHEREOF,
the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.
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PRESTO AUTOMATION INC. |
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Name: |
Xxxxxxxxx Xxxxxxx |
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Title: |
Interim Chief Executive Officer |
[Signature Page to Amended
January 2024 Warrant (CEOF Holdings LP)
EXHIBIT A
EXERCISE NOTICE
TO BE EXECUTED BY THE
REGISTERED HOLDER TO EXERCISE THIS
WARRANT TO PURCHASE COMMON STOCK
PRESTO AUTOMATION INC.
The undersigned
holder hereby exercises the right to purchase________________ of the shares of Common Stock (“Warrant Shares”)
of Presto Automation Inc., a Delaware corporation (the “Company”), evidenced by the attached Warrant to Purchase Common
Stock (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective meanings
set forth in the Warrant.
1. Form
of Exercise Price. The Holder intends that payment of the Exercise Price shall be made as:
a
“Cash Exercise” with respect to_________________ Warrant Shares;
and/or
a
“Cashless Exercise” with respect to______________ Warrant Shares.
In the event that the Holder
has elected a Cashless Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the Holder hereby represents
and warrants that this Exercise Notice was executed by the Holder at [a.m.][p.m.] on the date set forth below.
2. Payment
of Exercise Price. In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued
pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of $__________________ to the Company in accordance
with the terms of the Warrant.
3. Delivery
of Warrant Shares. The Company shall deliver to the holder_____________________ Warrant Shares in accordance with the terms of the
Warrant.
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Physical Delivery |
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Date:______________ __,
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Name of Registered Holder |
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ACKNOWLEDGMENT
The Company hereby
acknowledges this Exercise Notice and hereby directs [TRANSFER AGENT] to issue the above indicated number of shares of Common Stock in
accordance with the Transfer Agent Instructions dated_________________ from the Company and acknowledged and agreed to by [TRANSFER
AGENT].
ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, all
of or shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to
Dated:_______________, ______
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Holder’s Address: |
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NOTE: The signature to
this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever.