Exhibit 10.11 


 


DEBENTURE REGISTRATION
RIGHTS AGREEMENT


 


 


THIS DEBENTURE REGISTRATION
RIGHTS AGREEMENT (this “Agreement”), dated as of March 18, 2014, by and between MassRoots, Inc., a Delaware
corporation (the “Company”), and the undersigned (the “Holder”). The Company and the Holder
are hereinafter sometimes collectively referred to as the “Parties” and each a “Party” to
this Agreement.


 


RECITALS:


 


WHEREAS, upon the terms
and subject to the conditions of that certain Subscription Agreement, of even date herewith, by and between the Holder and the
Company (the “Subscription Agreement”), the Company has agreed to issue and sell to the Holder convertible debentures
and warrants of the Company, which will be convertible or exercisable into shares of common stock, $0.001 par value per share (the
“Common Stock”), of the Company; and


 


WHEREAS, to induce the
Holder to execute and deliver (i) the Subscription Agreement, (ii) this Agreement, (iii) that certain Debenture, of even date herewith,
by and between the Company and the Holder (the “Debenture”), and (vi) all agreements referenced in the foregoing
documents (collectively, the “Transaction Documents”), the Company has agreed to provide certain registration
rights under the Securities Act of 1933, as amended (the “Securities Act”) and the rules and regulations promulgated
thereunder, and applicable state securities laws, with respect to the shares of Common Stock issuable pursuant to the Transaction
Documents.


 


NOW, THEREFORE, for and
in consideration of the foregoing premises, the agreements and covenants herein contained, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and the Holder, intending to be legally bound, hereby
agree as follows:


 


 


1. Definitions. As used
in this Agreement, the following terms shall have the following meanings:


 


a.“Closing Date”
shall mean on or about March 24, 2014.


 


b.“Debentures” shall
mean the convertible debenture issued by the Company to the Holder pursuant to the Debenture.


 


c.“Holder” shall
mean the Parties other than the Company executing this Agreement.


 


d. “Effective Date”
shall mean the date the SEC declares the Registration Statement effective and the Company has filed all necessary amendments, including
the letter to request accelerated effectiveness and the Prospectus covering the resale of Shares.


 




    	 



    	 



    

e. “Face Amount”
means Four Hundred Seventy-Five Thousand U.S. Dollars ($475,000) to be invested in the aggregate by all of the Holders.


 


f. “Filing Date”
shall mean the date the Registration Statement has been filed with the SEC (as determined by EDGAR) and no stop order of acceptance
has been issued by the SEC.


 


g. “Person” means
a corporation, a limited liability company, an association, a partnership, an organization, a business, an individual, a governmental
or political subdivision thereof or a governmental agency.


 


h. “Potential Material Event”
means any of the following: (i) the possession by the Company of material information not ripe for disclosure in a Registration
Statement, which shall be evidenced by determinations in good faith by the Board of Directors of the Company that disclosure of
such information in the Registration Statement would be detrimental to the business and affairs of the Company, or (ii) any event
or activity concerning the Company which would, based on a good faith determination by the Company's Board of Directors, adversely
affect the Company or its shareholders if it were included in a Registration Statement or other filing.


 


i.“Principal Market”
means either The American Stock Exchange, Inc., The New York Stock Exchange, Inc., the Nasdaq National Market, The Nasdaq SmallCap
Market, OTC electronic bulletin board, or OTC Markets, whichever is the principal market on which the Common Stock is listed.


 


j. “Register”, “Registered”
and “Registration” refer to a registration effected by preparing and filing with
the SEC one or more Registration Statements in compliance with the Securities Act and pursuant to Rule 415 under the Securities
Act or any successor rule providing for offering securities on a continuous basis (“Rule 415”), and effectiveness
of such Registration Statement(s).


 


k. “Registrable Securities”
means the shares of Common Stock issued or issuable (i) pursuant to the Subscription Agreement and the Transaction Documents, and
(ii) any shares of capital stock issued or issuable with respect to such shares of Common Stock as a result of any stock split,
stock dividend, recapitalization, exchange or similar event or otherwise, which have not been (x) included in a Registration Statement
that has been declared effective by the SEC, (y) sold under circumstances meeting all of the applicable conditions of Rule 144,
promulgated under the Securities Act or (z) saleable without limitation as to time, manner and volume pursuant to Rule 144(k) (or
any similar provision then in force) under the Securities Act.


 


l.“Registration Statement”
means a registration statement of the Company filed under the Securities Act.


 


 


 




    	 



    	 



    

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


 


All capitalized terms used
but not defined in this Agreement shall have the meaning ascribed to them in the Transaction Documents.


 


For the purposes of determining
dates for penalties or filing deadlines, as outlined in this Agreement, both parties agree that the date given by the SEC shall
constitute the official date.


 


2.Registration.


 


a.Mandatory Registration. Within
forty-five (45) days following the Closing Date, the Company shall prepare and file with the SEC a Registration Statement or Registration
Statements (as is necessary) covering the resale of all of the Registrable Securities, which Registration Statement(s) shall state
that, in accordance with Rule 415 promulgated under the Securities Act, such Registration Statement also covers such indeterminate
number of additional shares of Common Stock as may become issuable upon stock splits, stock dividends or similar transactions.
The Company shall initially register for resale an amount of shares of Common Stock which would be issuable on the date preceding
the filing of the Registration Statement based on the Conversion Price (as defined in the Debenture) of the Debenture or the Exercise
Price (as defined in the Warrant); or an amount equal to the maximum amount allowed under Rule 415 (a)(1)(i) as interpreted by
the SEC. In the event the Company cannot register sufficient shares of Common Stock, due to the remaining number of authorized
shares of Common Stock being insufficient, the Company will use its best efforts to register the maximum number of shares it can
based on the remaining balance of authorized shares and will use its best efforts to increase the number of its authorized shares
as soon as reasonably practicable.


 


b.The Company shall use its best efforts
to have the Registration Statement filed with the SEC within 45 days following the Closing Date. (“Filing Deadline”).
If the Registration Statement covering the Registrable Securities required to be filed by the Company pursuant to Section 2(a)
hereof is not filed by the Filing Deadline, then the Company shall pay the Holder the sum of two percent (2%) of the Face Amount
of the Debentures outstanding as liquidated damages, and not as a penalty.


 


Notwithstanding the foregoing,
the amounts payable by the Company pursuant to this Section 2 shall not be payable to the extent any delay in the filing
of the Registration Statement occurs because of an act of, or a failure to act or to act timely by the Holder or is otherwise attributable
to the Holder.


 


The liquidated damages set forth in this
Section 2 shall continue until the obligation is fulfilled and shall be paid, at the Holder's option in cash or common stock
priced at the Conversion Price, or portion thereof, until the Registration Statement is filed. Failure of the Company to make payment
within said three (3) business days shall be considered a breach of this Agreement, and the Holder may elect to pursue remedies
as outlined in this Section 2. 


 




    	 



    	 



    

The Company acknowledges
that its failure to have the Registration Statement filed by the Filing Deadline will cause the Holder to suffer irreparable harm,
and, that damages will be difficult to ascertain. Accordingly, the Parties agree that it is appropriate to include in this Agreement
a provision for liquidated damages. The Parties acknowledge and agree that the liquidated damages provision set forth in this section
represents the parties’ good faith effort to quantify such damages and, as such, agree that the form and amount of such liquidated
damages are reasonable and will not constitute a penalty. The payment of liquidated damages shall not relieve the Company from
its obligations to register the Common Stock and deliver the Common Stock pursuant to the terms of this Agreement, the Subscription
Agreement and the Debenture.


 


c.The Company shall use its best efforts
and take all available steps to have the Registration Statement declared effective by the SEC within one hundred eighty (180) calendar
days after the Filing Deadline (the “Effective Deadline”). If the Registration Statement covering the Registrable Securities
required to be filed by the Company pursuant to Section 2(a) hereof has
not become effective by the Effective Deadline,
then the Company shall pay the Holder the sum of two percent (2%) of the Face Amount as liquidated damages, and not as a penalty,
following the one hundred eighty (180) calendar day period until the Registration Statement becomes effective.


 


If the Registration Statement
covering the Registrable Securities required to be filed by the Company pursuant to Section 2(a) hereof has
become effective, and, thereafter, the Holder’s right to sell is suspended, for any reason, then the Company shall
pay the Holder the sum of two percent (2%) of the Face Amount plus interest and penalties due to the Holder for the Registrable
Securities pursuant to the Subscription Agreement for each ten (10) calendar day period, pro rata, compounded daily, following
the suspension, until such suspension ceases.


 


Notwithstanding the foregoing,
the amounts payable by the Company pursuant to this Section 2 shall not be payable to the extent any delay in the effectiveness
of the Registration Statement or any suspension of the effectiveness occurs because of an act of, or a failure to act or to act
timely by the Holder or is otherwise attributable to the Holder.


 


The damages set forth in this Section
2 shall continue until the obligation is fulfilled and shall be paid within three (3) business days after each ten (10) day
period, or portion thereof, until the Registration Statement is declared effective or such suspension is released. Failure of the
Company to make payment within said three (3) business days shall be considered a default. 


 


The Company acknowledges
that its failure to have the Registration Statement become
effective by the Effective Deadline or to permit the suspension of the effectiveness of the Registration Statement, will cause
the Holder to suffer irreparable harm and, that damages will be difficult to ascertain. Accordingly, the parties agree that it
is appropriate to include in this Agreement a provision for liquidated damages. The parties acknowledge and agree that the liquidated
damages provision set forth in this section represents the parties’ good faith effort to quantify such damages and, as such,
agree that the form and amount of such liquidated damages are reasonable and will not constitute a penalty. The payment of liquidated
damages shall not relieve the Company from its obligations to register the Common Stock and deliver the Common Stock pursuant to
the terms of this Agreement, the Subscription Agreement and the Debenture.




    	 



    	 



    

 


d. The Company agrees to only register
such securities as are necessary to meet its obligations to the Holder and agrees not to register additional securities without
the Holder's prior written consent to be agreed upon in writing by the Holder before the Filing Date.
Furthermore, the Company agrees that it will not file any other Registration Statement, including those on Form S-8 or Form
S-4, for other securities, until there is no balance left on the Debenture, unless it has the prior written approval from the Holder.
Failure to obtain prior written approval from the Holder will cause the Holder to suffer damages that will be difficult to ascertain.
Accordingly, the Parties agree that it is appropriate to include a provision for liquidated damages and the Company agrees to pay
the Holder the sum of two percent (2%) of the Face Amount as liquidated damages and not as a penalty for each thirty (30) calendar
day period, pro rata, compounded daily, until the unauthorized Registration Statement is withdrawn.


 


e.Mandatory filing with FINRA.
By the Effective Deadline, the Company shall have prepared with a Financial Investment Regulatory Authority (“FINRA”)
registered market maker (“Market Maker”), to; (i) file a Form 15c2-11 (“Form 15c”) with FINRA, to request
a trading symbol for, and as notification of its intentions for, the Common Stock to become publicly-traded and quoted on a Principal
Market, and (ii) as soon as the Company is able upon clearance of the Form 15c, cause the Market Maker and/or a securities clearing
firm to coordinate with the Depository Trust & Clearing Corporation (“DTCC”),to have the Common Stock eligible
for electronic clearing and transfer (“DTC Filing”, together with the Form 15c, the “15c Documents”). The
Form 15c , shall be filed within three (3) days of the Effective Date and the DTC Filing shall be made upon clearance of the Form
15c by FINRA.


 


The Company shall use its
best efforts to have the Form 15c filed with FINRA within three (3) days following the Effective Date (“15c Filing Deadline”).
If the 15c Documents required to be filed by the Company pursuant to Section 2(e) hereof are not filed by the 15c Filing
Deadline, then the Company shall pay the Holder the sum of two percent (2%) of the Face Amount of the Debentures outstanding as
liquidated damages, and not as a penalty.


 


Notwithstanding the foregoing,
the amounts payable by the Company pursuant to this Section 2 shall not be payable to the extent any delay in the filing
of the Form 15c occurs because of an act of, or a failure to act or to act timely by the Holder or is otherwise attributable to
the Holder.


 


The liquidated damages set forth in this
Section 2 shall continue until the obligation is fulfilled and shall be paid, at the Holder's option in cash or common stock
priced at the Conversion Price, or portion thereof, until the Form 15c is filed. Failure of the Company to make payment within
said three (3) business days shall be considered a breach of this Agreement, and the Holder may elect to pursue remedies as outlined
in this Section 2. 


 


The Company acknowledges
that its failure to have the Form 15c and the DTC Filing as provided herein will cause the Holder to suffer irreparable harm, and,
that damages will be difficult to ascertain. Accordingly, the Parties agree that it is appropriate to include in this Agreement
a provision for liquidated damages. The Parties acknowledge and agree that the




    	 



    	 



    

liquidated damages provision set forth in this
section represents the parties’ good faith effort to quantify such damages and, as such, agree that the form and amount of
such liquidated damages are reasonable and will not constitute a penalty. The payment of liquidated damages shall not relieve the
Company from its obligations to file and have declared effective, the 15c Documents, pursuant to the terms of this Agreement.


 


f.The Company shall use its best efforts
and take all available steps to have the 15c Documents declared effective by FINRA and DTCC, within sixty (60) calendar days after
the 15c Filing Deadline (“15c Documents Filing Deadline”). If the 15c Documents required to be filed by the Company
pursuant to Section 2(e) hereof have
not become effective within said 30-day period
of time, then the Company shall pay the Holder the sum of two percent (2%) of the Face Amount as liquidated damages, and not as
a penalty, following the thirty days (30) calendar day period until the 15c Documents become effective.


 


If the 15c Documents required
to be filed by the Company pursuant to Section 2(e) hereof have
become effective, and, thereafter, the Holder’s right to sell is suspended, for any reason, then the Company shall
pay the Holder the sum of two percent (2%) of the Face Amount plus interest and penalties due to the Holder for the Face Amount
pursuant to the Subscription Agreement for each ten (10) calendar day period, pro rata, compounded daily, following the suspension,
until such suspension ceases.


 


Notwithstanding the foregoing,
the amounts payable by the Company pursuant to this Section 2 shall not be payable to the extent any delay in the effectiveness
of the 15c Documents, or any suspension of the effectiveness occurs because of an act of, or a failure to act or to act timely
by the Holder or is otherwise attributable to the Holder.


 


The damages set forth in this Section
2 shall continue until the obligation is fulfilled and shall be paid within three (3) business days after each ten (10) day
period, or portion thereof, until the 15c Documents are declared effective or such suspension is released. Failure of the Company
to make payment within said three (3) business days shall be considered a default. 


 


The Company acknowledges
that its failure to have the 15c Documents become
effective within said 15c Documents Filing Deadline or to permit the suspension of the effectiveness of the 15c Documents,
will cause the Holder to suffer irreparable harm and, that damages will be difficult to ascertain. Accordingly, the parties agree
that it is appropriate to include in this Agreement a provision for liquidated damages. The parties acknowledge and agree that
the liquidated damages provision set forth in this section represents the parties’ good faith effort to quantify such damages
and, as such, agree that the form and amount of such liquidated damages are reasonable and will not constitute a penalty. The payment
of liquidated damages shall not relieve the Company from its obligations to register the Common Stock and deliver the Common Stock
pursuant to the terms of this Agreement, the Subscription Agreement and the Debenture.


 


 




    	 



    	 



    

3.Related
Obligations.


 


At such time as the Company
is obligated to prepare and file a Registration Statement with the SEC pursuant to Section 2(a) hereof, the Company will
use its best efforts to effect the registration of the Registrable Securities in accordance with the intended method of disposition
thereof and, with respect thereto, the Company shall have the following obligations:


 


 


a.The Company shall use its best efforts
to cause such Registration Statement relating to the Registrable Securities to become effective within one hundred eighty (180)
calendar days after the Filing Deadline and shall keep such Registration Statement effective pursuant to Rule 415 under the Securities
Act until the date on which (A) the Holder shall have sold all the Registrable Securities or the shares included therein otherwise
cease to be Registrable Securities, and (B) the Holder has no right to convert the securities it owns into Common Stock under the
Subscription Agreement or Debenture, respectively (the “Registration Period”), which Registration Statement
(including any amendments or supplements thereto and prospectuses contained therein) shall, as of the date thereof, not contain
any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the
statements therein, in light of the circumstances in which they were made, not misleading.


 


b.The Company shall prepare and file
with the SEC such amendments (including post-effective amendments) and supplements to a Registration Statement and the prospectus
used in connection with such Registration Statement, which prospectus is to be filed pursuant to Rule 424 under the Securities
Act, as may be necessary to keep such Registration Statement effective during the Registration Period, and, during such period,
comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities of the Company covered
by such Registration Statement until such time as all of such Registrable Securities shall have been disposed of in accordance
with the intended methods of disposition by the Holder as set forth in such Registration Statement. In the event the number of
shares of Common Stock available under a Registration Statement filed pursuant to this Agreement is at any time insufficient to
cover all of the Registrable Securities, the Company shall amend such Registration Statement, or file a new Registration Statement
(on the short form available therefor, if applicable), or both, so as to cover all of the Registrable Securities, in each case,
as soon as practicable, but in any event within thirty (30) calendar days after the necessity therefor arises (based on the then
Purchase Price of the Common Stock and other relevant factors on which the Company reasonably elects to rely), assuming the Company
has sufficient authorized shares at that time, and if it does not, within thirty (30) calendar days after such shares are authorized.
The Company shall use it best efforts to cause such amendment and/or new Registration Statement to become effective as soon as
practicable following the filing thereof.


 


Prior to conversion of
all the Shares (as defined in the Debenture) if at any time the conversion of all the Shares outstanding would result in an insufficient
number of authorized shares of Common Stock being available to cover all the conversions, or in the event that Holder deems that
the Shares authorized will become insufficient, the Company will move to call and hold a shareholder’s meeting within thirty
(30) calendar days for the sole purpose of authorizing additional shares of Common Stock to facilitate the conversions. In such
an event the Company shall recommend to all shareholders and management of the Company to vote their shares in




    	 



    	 



    

favor of increasing the authorized number of
shares of Common Stock in sufficient number to fully cover the Holder's conversion rights. The Company represents and warrants
that under no circumstances will it deny or prevent Holder’s right to convert the Shares as permitted under the terms of
the Subscription Agreement, this Agreement or any of the other Transaction Documents. The Holder retains the right to request additional
shares upon the determination the company may not be able to facilitate conversions in the future.


 


cThe Company shall furnish to the Holder
whose Registrable Securities are included in any Registration Statement and its legal counsel without charge and upon request (i)
promptly after the same is prepared and filed with the SEC at least one copy of such Registration Statement and any amendment(s)
thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits, the prospectus
included in such Registration Statement (including each preliminary prospectus) and, with regards to such Registration Statement(s),
any correspondence by or on behalf of the Company to the SEC or the staff of the SEC and any correspondence from the SEC or the
staff of the SEC to the Company or its representatives, (ii) upon the effectiveness of any Registration Statement, a copy of the
prospectus included in such Registration Statement and all amendments and supplements thereto (or such other number of copies as
the Holder may reasonably request) and (iii) such other documents, including copies of any preliminary or final prospectus, as
the Holder may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities. The Company
filing the documents described in this paragraph through EDGAR shall constitute delivery.


 


d.The Company shall use reasonable
efforts to (i) register and qualify the Registrable Securities covered by a Registration Statement under the applicable securities
or “blue sky” laws of such states of the United States as reasonably specified by the Holder, (ii) prepare and file
in those jurisdictions, such amendments (including post-effective amendments) and supplements to such registrations and qualifications
as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may
be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv)
take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions;
provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do
business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(d), (y) subject
itself to general taxation in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction.
The Company shall promptly notify the Holder who holds Registrable Securities of the receipt by the Company of any notification
with respect to the suspension of the registration or qualification of any of the Registrable Securities for sale under the securities
or “blue sky” laws of any jurisdiction in the United States or its receipt of actual notice of the initiation or threatening
of any proceeding for such purpose.


 


e. The Company shall immediately
notify the Holder in writing of the happening of any event as a result of which the prospectus included in a Registration Statement,
as then in effect, would then contain an untrue statement of a material fact or omission to state a material fact, which would
otherwise be required to be stated therein or necessary to make the statements therein, in light of the circumstances under which
they were made, not misleading;




    	 



    	 



    

and, as a result, is required to be supplemented
or as a result of which the Registration Statement is required to be amended (“Registration Default”) and use
all diligent efforts to promptly prepare any necessary supplement to such prospectus or amendment to such Registration Statement
and take any other necessary steps to cure the Registration Default, (which, if such Registration Statement is on Form S-3, may
consist of a document to be filed by the Company with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”) and to be incorporated by reference in the prospectus) to correct
such untrue statement or omission, and deliver one (1) copy of such supplement or amendment to Holder (or such other number of
copies as Holder may reasonably request; delivery via EDGAR shall constitute delivery). Failure to cure the Registration Default
within five (5) business days shall result in the Company paying liquidated damages of two percent (2%) of the then outstanding
principal amount of the Debentures then held by the Holder for each thirty (30) calendar day period or portion thereof, beginning
on the date of suspension. The Company shall also promptly notify Holder in writing (i) when a prospectus or any prospectus supplement
or post-effective amendment has been filed, and when a Registration Statement or any post-effective amendment has become effective
(notification of such effectiveness shall be delivered to Holder by facsimile on the same day of such effectiveness and by overnight
mail), (ii) of any request by the SEC for amendments or supplements to a Registration Statement or related prospectus or related
information, (iii) of the Company's reasonable determination that a post-effective amendment to a Registration Statement would
be appropriate, (iv) in the event the Registration Statement is no longer effective or, (v) the Registration Statement is stale
for a period of more than five (5) Trading Days as a result of the Company’s failure to timely file its financials with the
SEC.


 


The Company acknowledges
that its failure to cure the Registration Default within three (3) business days will cause the Holder irreparable harm, and that
damages will be difficult to ascertain. Accordingly, the parties agree that it is appropriate to include in this Agreement a provision
for liquidated damages. The parties acknowledge and agree that the liquidated damages provision set forth in this section represents
the parties’ good faith effort to quantify such damages and, as such, agree that the form and amount of such liquidated damages
are reasonable and will not constitute a penalty.


 


It is the intention of
the parties that interest payable under any of the terms of this Agreement shall not exceed the maximum amount permitted under
any applicable law. If a law, which applies to this Agreement which sets the maximum interest amount, is finally interpreted so
that the interest in connection with this Agreement exceeds the permitted limits, then: (1) any such interest shall be reduced
by the amount necessary to reduce the interest to the permitted limit; and (2) any sums already collected (if any) from the Company
which exceed the permitted limits will be refunded to the Company. The Holder may choose to make this refund by reducing the amount
that the Company owes under this Agreement or by making a direct payment to the Company. If a refund reduces the amount that the
Company owes the Holder, the reduction will be treated as a partial payment. In the event that any provision of this Agreement
is held by a court of competent jurisdiction to be excessive in scope or otherwise invalid or unenforceable, such provision shall
be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent possible, and the validity and enforceability
of the remaining provisions of this Agreement will not in any way be affected or impaired thereby.




    	 



    	 



    

 


f. The Company shall use its best efforts
to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement, or the suspension of
the qualification of any of the Registrable Securities for sale in any jurisdiction and, if such an order or suspension is issued,
to obtain the withdrawal of such order or suspension at the earliest possible moment and to notify the Holder of the issuance of
such order and the resolution thereof. The Company will immediately notify the Holder of a proceeding, or threat of proceeding,
the result of which could affect the effectiveness of the registration statement.


 


g.The Company shall permit the Holder
and its counsel, of the Holder's choosing, to review and comment upon all Registration Statements, amendments and supplements,
at least seven (7) days prior to filing. The Company shall not file any Registration Statement with which Holder or its counsel
reasonably objects.


 


h.The Company shall make available
for inspection by (i) the Holder and (ii) one firm of attorneys and one firm of accountants or other agents retained by the Holder
(collectively, the “Inspectors”) all pertinent financial and other records, and pertinent corporate documents
and properties of the Company (collectively, the “Records”), as shall be reasonably deemed necessary by each
Inspector, and cause the Company's officers, directors and employees to supply all information which any Inspector may reasonably
request; provided, however, that each Inspector shall hold in strict confidence and shall not make any disclosure (except to the
Holder) or use of any Record or other information which the Company determines in good faith to be confidential, and of which determination
the Inspectors are so notified, unless (a) the disclosure of such Records is necessary to avoid or correct a misstatement or omission
in any Registration Statement or is otherwise required under the Securities Act, (b) the release of such Records is ordered pursuant
to a final, non-appealable subpoena or order from a court or government body of competent jurisdiction, or (c) the information
in such Records has been made generally available to the public other than by disclosure in violation of this or any other agreement
of which the Inspector has knowledge. The Holder agrees that it shall, upon learning that disclosure of such Records is sought
in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to the Company and allow
the Company, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, the
Records deemed confidential.


 


i.The Company shall hold in confidence
and not make any disclosure of information concerning the Holder unless (i) disclosure of such information is necessary to comply
with federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a misstatement
or omission in any Registration Statement, (iii) the release of such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such information has been made generally
available to the public other than by disclosure in violation of this Agreement or any other agreement. The Company agrees that
it shall, upon learning that disclosure of such information concerning a Holder is sought in or by a court or governmental body
of competent jurisdiction or through other means, give prompt written notice to the Holder and allow the Holder, at the Holder's
expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.




    	 



    	 



    

 


j.The Company shall use its best efforts
to secure designation and quotation of all the Registrable Securities covered by any Registration Statement on the Principal Market.
If, despite the Company's best efforts, the Company is unsuccessful in satisfying this obligation, it shall use its best efforts
to cause all the Registrable Securities covered by any Registration Statement to be listed on each other national securities exchange
and automated quotation system, if any, on which securities of the same class or series issued by the Company are then listed,
if any, if the listing of such Registrable Securities is then permitted under the rules of such exchange or system. If, despite
the Company's best efforts, the Company is unsuccessful in satisfying its obligation in this Section, it will use its best efforts
to secure the inclusion for quotation with Pink Sheets, LLC. The Company shall pay all fees and expenses in connection with satisfying
its obligation under this Section 3(k).


 


k.The Company shall cooperate with
the Holder to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legend) representing
the Registrable Securities to be offered pursuant to a Registration Statement and enable such certificates to be in such denominations
or amounts, as the case may be, as the Holder may reasonably request and registered in such names of the Persons who shall acquire
such Registrable Securities from the Holder, as the Holder may request.


 


l.The Company shall provide a transfer
agent for all the Registrable Securities not later than the Effective Date of the first Registration Statement filed pursuant hereto.


 


m.If requested by the Holder, the Company
shall (i) as soon as reasonably practical, incorporate in a prospectus supplement or post-effective amendment such information
as Holder reasonably determines should be included therein relating to the sale and distribution of Registrable Securities, including,
without limitation, information with respect to the offering of the Registrable Securities to be sold in such offering; (ii) make
all required filings of such prospectus supplement or post-effective amendment as soon as notified of the matters to be incorporated
in such prospectus supplement or post-effective amendment; and (iii) supplement or make amendments to any Registration Statement
if reasonably requested by Holder.


 


n.The Company shall use its best efforts
to cause the Registrable Securities covered by the applicable Registration Statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable Securities.


 


o.The Company shall make available
to the Holder as soon as reasonably practical, but not later than ninety (90) calendar days after the close of the period covered
thereby, an earnings statement (in form complying with the provisions of Rule 158 under the Securities Act) covering a 12-month
period beginning not later than the first day of the Company's fiscal quarter next following the effective date of any Registration
Statement. Filing via EDGAR shall constitute delivery.


 




    	 



    	 



    

p.The Company shall otherwise use its
best efforts to comply with all applicable rules and regulations of the SEC in connection with any registration hereunder.


 


q.Within one (1) business day after
the Registration Statement which includes Registrable Securities is declared effective by the SEC, the Company shall deliver, and
shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities, with copies to the
Holder, confirmation that such Registration Statement has been declared effective by the SEC in the form attached hereto as Exhibit
A.


 


r.After the SEC declares the Registration
Statement cleared of all comments and the Company's acceptance of the effectiveness of the Registration Statement, the Company
shall file a prospectus covering the resale of the Shares (“Prospectus”) within two (2) trading days.


 


s.The Company shall take all other
reasonable actions necessary to expedite and facilitate disposition by the Holder of the Registrable Securities pursuant to a Registration
Statement.


 


 


 


4.Obligations
Of The Holder.


 


a.At least five (5) calendar days prior
to the first anticipated filing date of a Registration Statement, the Company shall notify the Holder in writing of the information
the Company requires from the Holder. The Holder covenants and agrees that, in connection with any resale of Registrable Securities
by it pursuant to a Registration Statement, it shall comply with the “Plan of Distribution” section of the current
prospectus relating to such Registration Statement.


 


b.The Holder, by the
Holder's acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company
in connection with the preparation and filing of any Registration Statement hereunder and in responding to SEC comments in connection
therewith.


 


c.The Holder agrees
that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(f) hereof
or the first sentence of Section 3(e) hereof, the Holder will immediately discontinue disposition of Registrable Securities
pursuant to any Registration Statement(s) covering such Registrable Securities until Holder's receipt of the copies of the supplemented
or amended prospectus contemplated by Section 3(f) hereof or the first sentence of Section 3(e) hereof.


 




    	 



    	 



    

5.Expenses
Of Registration.


 


All expenses, other than
underwriting discounts and commissions, incurred in connection with registrations, filings or qualifications pursuant to Section
2 and Section 3 hereof, including, without limitation, all registration, listing and qualifications fees, printing and
accounting fees, and reasonable fees and disbursements of counsel for the Company shall be paid by, and are the sole obligation
of, the Company.


 


6.Indemnification.


 


In the event any Registrable
Securities are included in a Registration Statement under this Agreement:


 


 


a.To the fullest extent permitted by
law, the Company will, and hereby agrees to, indemnify, hold harmless and defend the Holder who holds such Registrable Securities,
the directors, officers, partners, employees, agents, representatives of, and each Person, if any, who controls Holder within the
meaning of the Securities Act or the Exchange Act) (each, an “Indemnified Person”), against any losses, claims,
damages, liabilities, judgments, fines, penalties, charges, costs, attorneys' fees, amounts paid in settlement or expenses, joint
or several (collectively, “Claims”), incurred in investigating, preparing or defending any action, claim, suit,
inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative or
other regulatory agency, body or the SEC, whether pending or threatened, whether or not an indemnified party is or may be a party
thereto (Indemnified Damages”), to which any of them may become subject insofar as such Claims (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue
statement of a material fact in a Registration Statement or any post-effective amendment thereto or in any filing made in connection
with the qualification of the offering under the securities or other “blue sky” laws of any jurisdiction in which Registrable
Securities are offered (“Blue Sky Filing”), or the omission or alleged omission to state a material fact required
to be stated therein or necessary to make the statements therein, in light of the circumstances under which the statements therein
were made, not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in the final prospectus
(as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or
alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances
under which the statements therein were made, not misleading, or (iii) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any other law, including, without limitation, any state securities law, or any rule or regulation
thereunder relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement (the matters in the
foregoing clauses (i) through (iii) being, collectively, “Violations”). Subject to the restrictions set forth
in Section 6(c) hereof with respect to the number of legal counsel, the Company shall reimburse the Holder and each such
controlling person, promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable
expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary
contained herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim arising out
of or based upon a Violation committed by any




    	 



    	 



    

Indemnified Person or which occurs in reliance
upon and in conformity with information furnished in writing to the Company by any Indemnified Person expressly for use in connection
with the preparation of the Registration Statement or any such amendment thereof or supplement thereto, if such prospectus were
timely made available by the Company pursuant to Section 3(c) hereof; (ii) shall not be available to the extent such Claim
is based on (a) a failure of the Holder to deliver or to cause to be delivered the prospectus made available by the Company or
(b) the Indemnified Person's use of an incorrect prospectus despite being promptly advised in advance by the Company in writing
not to use such incorrect prospectus; and (iii) shall not apply to amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of the Company, which consent shall not be unreasonably withheld. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive
the resale of the Registrable Securities by the Holder pursuant to the Registration Statement.


 


b.Promptly after receipt by an Indemnified
Person or Indemnified Party under this Section 6 of notice of the commencement of any action or proceeding (including any
governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in respect
thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice
of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the case may be; provided,
however, that an Indemnified Person or Indemnified Party shall have the right to retain its own counsel with the fees and expenses
to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation
by such counsel of the Indemnified Person or Indemnified Party and the indemnifying party would be inappropriate due to actual
or potential differing interests between such Indemnified Person or Indemnified Party and any other party represented by such counsel
in such proceeding. The indemnifying party shall pay for only one separate legal counsel for the Indemnified Persons or the Indemnified
Parties, as applicable, and such counsel shall be selected by the Holder, if the Holder is entitled to indemnification hereunder,
or the Company, if the Company is entitled to indemnification hereunder, as applicable. The Indemnified Party or Indemnified Person
shall cooperate fully with the indemnifying party in connection with any negotiation or defense of any such action or claim by
the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified Party
or Indemnified Person which relates to such action or claim. The indemnifying party shall keep the Indemnified Party or Indemnified
Person fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying
party shall be liable for any settlement of any action, claim or proceeding effected without its written consent, provided, however,
that the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without
the consent of the Indemnified Party or Indemnified Person, consent to entry of any judgment or enter into any settlement or other
compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified
Party or Indemnified Person of a release from all liability in respect to such Claim. Following indemnification as provided for
hereunder, the indemnifying party shall be subrogated




    	 



    	 



    

to all rights of the Indemnified Party or Indemnified
Person with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made.
The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action
shall not relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section
6, except to the extent that the indemnifying party is actually prejudiced in its ability to defend such action.


 


c.The indemnification required by this
Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as
and when bills are received or Indemnified Damages are incurred.


 


d.The indemnity agreements contained
herein shall be in addition to (i) any cause of action or similar right of the Indemnified Party or Indemnified Person against
the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant to the law.


 


7.Contribution.


 


To the extent any indemnification
by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect
to any amounts for which it would otherwise be liable under Section 6 hereof to the fullest extent permitted by law; provided,
however, that: (i) no contribution shall be made under circumstances where the maker would not have been liable for indemnification
under the fault standards set forth in Section 6 hereof; (ii) no seller of Registrable Securities guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any seller of Registrable Securities
who was not guilty of fraudulent misrepresentation; and (iii) contribution by any seller of Registrable Securities shall be limited
in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities.


 


8.Reports Under The Exchange
Act.


With a view to making available
to the Holders the benefits of Rule 144 under the Securities Act or any similar rule or regulation of the SEC that may at any time
permit the Investors to sell securities of the Company to the public without registration (“Rule 144”) the Company
agrees to:


a.make and keep public information available, as those terms
are understood and defined in Rule 144;


 


b.file with the SEC in a timely manner
all reports and other documents required of the Company under the Securities Act and the Exchange Act so long as the Company remains
subject to such requirements and the filing of such reports and other documents as are required by the applicable provisions of
Rule 144; and


 




    	 



    	 



    

c.furnish to the Holder so long as
the Holder owns Registrable Securities, promptly upon request, (i) a written statement by the Company that it has complied with
the reporting requirements of Rule 144, the Securities Act and the Exchange Act, (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be
reasonably requested to permit the Investors to sell such securities pursuant to Rule 144 without registration.


 


9.No
Assignment Of Registration Rights.


 


The registration rights
and obligations under this Agreement shall not be assignable.


 


10.Amendment
Of Registration Rights.


 


Provisions of this Agreement
may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively
or prospectively), only with the written consent of both the Company and the Holder of the Registrable Securities. Any amendment
or waiver effected in accordance with this Section 10 shall be binding upon the Holder and the Company. No such amendment
shall be effective to the extent that it applies to less than all of the Holders of the Registrable Securities. No consideration
shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of this Agreement
unless the same consideration also is offered to all of the parties to this Agreement.


 


11.Miscellaneous.


 


a.Any notices, consents, waivers or
other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed
to have been delivered (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided a confirmation
of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one (1) day after
deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same.
The addresses for such communications shall be:


 


If to the Company:MassRoots, Inc.


Ste 370 #150


6525 Gunpark Drive,


Boulder, CO 80301





 


If to the Holder:Name:


Address:


 


Each party shall provide
five (5) business days prior notice to the other party of any change in address, phone number or facsimile number.


 




    	 



    	 



    

b.Failure of any Party to exercise
any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate
as a waiver thereof.


 


c. All disputes arising under this
Agreement shall be governed by and interpreted in accordance with the laws of the Commonwealth of Massachusetts, without regard
to principles of conflict of laws. The Parties shall submit all disputes arising under this Agreement to arbitration in Boston,
Massachusetts before a single arbitrator of the American Arbitration Association (the “AAA”). The arbitrator
shall be selected by application of the rules of the AAA, or by mutual agreement of the parties, except that such arbitrator shall
be an attorney admitted to practice law in the Commonwealth of Massachusetts. No Party shall challenge the jurisdiction or venue
provisions as provided in this Section. Nothing in this Section shall limit the Holder's right to obtain an injunction for a breach
of this Agreement from a court of law. Any injunction obtained shall remain in full force and effect until the arbitrator, as set
forth in section c., fully adjudicates the dispute.


 


d.This Agreement and the Transaction
Documents constitute the entire set of agreements among the parties hereto with respect to the subject matter hereof and thereof.
There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to in the Transaction Documents.


 


e.This Agreement and the Transaction
Documents supersede all prior agreements and understandings among the parties hereto with respect to the subject matter hereof
and thereof.


 


f.The headings in this Agreement are
for convenience of reference only and shall not limit or otherwise affect the meaning hereof.


 


g.This Agreement may be executed in
two or more counterparts, all of which taken together shall constitute one instrument. Execution and delivery of this Agreement
by exchange of facsimile copies bearing the facsimile signature of a party shall constitute a valid and binding execution and delivery
of this Agreement by such party. Such facsimile copies shall constitute enforceable original documents.


 


h.Each Party shall do and perform,
or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates,
instruments and documents, as the other Party may reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.


 


i.All consents and other determinations
to be made by the Holder pursuant to this Agreement shall be made, unless otherwise specified in this Agreement, by the Holder
holding a majority of the Registrable Securities.


 




    	 



    	 



    

j.The language used in this Agreement
will be deemed to be the language chosen by the Parties to express their mutual intent and no rules of strict construction will
be applied against any party.


 


k.The Company hereby represent and
warrants to the Holder that: (i) it has voluntarily entered into this Agreement of its own freewill, (ii) it is not entering into
this Agreement under economic duress, (iii) the terms of this Agreement are reasonable and fair to the Company, and (iv) the Company
has had independent legal counsel of its own choosing review this Agreement, advise the Company with respect to this Agreement,
and represent the Company in connection with its entering into this Agreement.


 


l.Notwithstanding anything in this
Agreement to the contrary, the parties hereto hereby acknowledge and agree to the following: (i) the Holder makes no representations
or covenants that it will not engage in trading in the securities of the Company; (ii) the Company has not and shall not provide
material non-public information to the Holder unless prior thereto the Holder shall have executed a written agreement regarding
the confidentiality and use of such information; and (iii) the Company understands and confirms that the Holder will be relying
on the acknowledgements set forth in clauses (i) through (iii) above if the Holder effects any transactions in the securities of
the Company.


 


12. Waiver.


 


The Holder's delay or failure
at any time or times hereafter to require strict performance by Company of any undertakings, agreements or covenants shall not
waive, affect, or diminish any right of the Holder under this Agreement to demand strict compliance and performance herewith. Any
waiver by the Holder of any Event of Default shall not waive or affect any other Event of Default, whether such Event of Default
is prior or subsequent thereto and whether of the same or a different type. None of the undertakings, agreements and covenants
of the Company contained in this Agreement, and no Event of Default, shall be deemed to have been waived by the Holder, nor may
this Agreement be amended, changed or modified, unless such waiver, amendment, change or modification is evidenced by an instrument
in writing specifying such waiver, amendment, change or modification and signed by the Holder.


 


13. Payment Of Liquidated Damages.


 


Any liquidated damages
or other fees incurred herein by the Company for failure to act in a timely manner shall be charged to the Face Amount of the Debenture
(as defined in the Debenture), unless specifically noted otherwise. The Holder reserves the rights to take payment of such amounts
in cash or in Common Stock priced at the Conversion Price (as defined in the Debenture).


 


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


 




    	 



    	 



    

 


 


IN WITNESS WHEREOF, the
parties hereto have caused this Debenture Registration Rights Agreement to be duly executed on the day and year first above written.


 


 


MassRoots,
Inc. 


 


 


By__________________Name:Isaac
Dietrich


Title: Chief
Executive Officer


 


 


 


			HOLDER



			



			



 


By: __________________________________


Name:


Title:


 


 


 


 


 


 


 


 


 


 


 


 




    	 



    	 



    

 


EXHIBIT A


 


FORM OF NOTICE OF EFFECTIVENESS


OF REGISTRATION STATEMENT


 


Date: __________


 


[TRANSFER AGENT]


 


Re:MassRoots,
Inc..


 


Ladies and Gentlemen:


 


We are counsel to MassRoots,
Inc., a Delaware corporation (the “Company”), and have represented the Company in connection with that certain
Subscription Agreement (the "Subscription Agreement") entered into by and among the Company and Dutchess the “Holder”
pursuant to which the Company has agreed to issue to the Holder shares of the Company's common stock, $0.001 par value per share
(the “Common Stock”) on the terms and conditions set forth in the Subscription Agreement. Pursuant to the Subscription
Agreement, the Company also has entered into a Registration Rights Agreement with the Holder (the “Registration Rights
Agreement”) pursuant to which the Company agreed, among other things, to register the Registrable Securities (as defined
in the Registration Rights Agreement), including the shares of Common Stock issued or issuable under the Subscription Agreement
under the Securities Act of 1933, as amended (the “Securities Act”). In connection with the Company's obligations
under the Registration Rights Agreement, on ____________ ___, 2014, the Company filed a Registration Statement on Form ________
(File No. 333-________) (the “Registration Statement”) with the United States Securities and Exchange Commission
(the “SEC”) relating to the Registrable Securities which names the Holder as a selling shareholder thereunder.


 


In connection with the
foregoing, we advise you that the Registration Statement
has become effective under the Securities Act at [enter the time of effectiveness] on [enter the date of effectiveness]
and to the best of our knowledge, after telephonic inquiry of a member of the SEC’s staff, no stop order suspending its effectiveness
has been issued and no proceedings for that purpose are pending before, or threatened by, the SEC and the Registrable Securities
are available for resale under the Securities Act pursuant to the Registration Statement.


 


Very truly yours,


 


[Company Counsel]


 


		By:	____________________