ex105-phunware2020invest






                                                                                                   THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,           AS  AMENDED  (THE  “ACT”),  OR  THE  APPLICABLE  STATE  SECURITIES  LAWS,           AND  MAY  NOT  BE  OFFERED  OR  SOLD  IN  THE  ABSENCE  OF  AN  EFFECTIVE           REGISTRATION STATEMENT UNDER THE ACT AND SUCH STATE              SECURITIES           LAWS,  OR  AN  EXEMPTION  FROM  REGISTRATION  THEREUNDER,  IN  EACH           CASE, TO THE EXTENT APPLICABLE HERETO.                                    SECURED PROMISSORY NOTE                                                                        New York, New York           $16,000,000                                                              July __, 2020                  FOR  VALUE  RECEIVED,  Alto  Opportunity  Master  Fund,  SPC - Segregated  Master           Portfolio B (the “Investor”) hereby promises to pay to Phunware, Inc., a Delaware corporation           (the “Company”), on the date set forth below, (i) the principal amount of Sixteen Million Dollars           ($16,000,000) and (ii) interest on the unpaid principal balance hereof at the rate set forth herein           (collectively, the “Obligations”).  This Promissory Note (this “Note”) has been issued pursuant to           the Note Purchase Agreement, dated as of July 14, 2020 (the “Subscription Date”), by and among           the Company and the Investor (as amended, modified, supplemented, extended,  renewed, restated           or replaced from time to time, the “Note Purchase Agreement”) as payment of the purchase price           of that certain Series B Senior Secured Convertible Note of the Company, with an initial aggregate           principal  amount  of  $17,280,000 (as  such  note  may  be  amended,  modified,  supplemented,           extended, renewed, restated or replaced from time to time in accordance with the terms thereof,           the “Series B Note”), issued pursuant to that certain Securities Purchase Agreement, dated as of           July 14, 2020 by and among the Company and the investors party thereto (as amended, modified,           supplemented,  extended,   renewed,  restated  or  replaced  from  time  to  time,  the  “Securities           Purchase Agreement”).  Capitalized terms not defined herein shall have the meaning as set forth           in  the  Series B Note.   NEITHER  THIS  NOTE  NOR  ANY  INTEREST  HEREIN  MAY  BE           PLEDGED,  ASSIGNED  OR  OTHERWISE  TRANSFERRED,  WHETHER  BY  THE           COMPANY,  OPERATION  OF   LAW,  COURT  ORDER  OR  OTHERWISE,  WITHOUT  THE           EXPRESS  PRIOR  WRITTEN  CONSENT  OF  THE  INVESTOR.  ANY  SUCH  PURPORTED           ASSIGNMENT OR TRANSFER WITHOUT SUCH CONSENT SHALL BE NULL AND VOID.                    1.    Payment  of  Principal.   The  principal  amount  of  this  Note  (the  “Principal”),           together with all unpaid interest accrued thereon and any other Obligations payable hereunder,           shall be due and payable in full upon the fortieth (40th) anniversary of the Scheduled Series B Note           Maturity Date (as defined below) (the “Maturity Date”); provided, that the Maturity Date shall           be automatically extended by one (1) calendar day for each calendar day after December 31, 2021           (the “Scheduled Series B Note Maturity Date”), if any, that all, or any part, of the Series B Note           remains outstanding.                  2.    Payment of Interest.  The unpaid Principal balance due hereunder shall bear interest           (the “Interest”) at an annual rate equal to 1.17% (the “Interest Rate”).  Subject to Sections 3 and           7 below, Interest shall be payable and due upon the Maturity Date.   All interest shall be computed      Error! Unknown document property name. 





 






         on the basis of a year of 365 or 366 days, as the case may be, for the actual number of days           (including the first day but excluding the last day) elapsed.                  3.    Prepayment Prior to the Maturity Date.                          (a)   Optional Prepayment.  The Investor may, at its option at any time on or after                 the date hereof, prepay, in whole or in part, without premium or penalty, the Obligations                 under this Note (each, an “Optional Prepayment”).                         (b)   Mandatory  Prepayment.   Upon  any  Mandatory  Prepayment  Event  (as                 defined below), the Investor shall promptly prepay such aggregate outstanding Principal of                 this Note equal to the applicable Mandatory Prepayment Amount (as defined below) with                 respect to such Mandatory Prepayment Event (each, a “Mandatory Prepayment”, and                 together with each Optional Prepayment, each a “Prepayment”).                        (c)   Mechanics of Prepayments.  All Prepayments hereunder shall be made in                 cash, by wire transfer, in U.S. dollars and immediately available funds, in accordance with                 the wire instructions delivered to the Investor by the Company on or prior to such date of                 such Prepayment.  At the option of the Company, prepayments may be made directly to                 the Company or to such other Persons as the Company may direct in its wire instructions.                        (d)   Cancellation  of  Interest  upon  Prepayment.   Notwithstanding  anything                 herein to the contrary, upon any Prepayment prior to the Maturity Date (including, without                 limitation, any Mandatory Prepayment), the aggregate cash amount in such Prepayment                 shall be applied entirely to and against any outstanding Principal under this Note, and any                 accrued and unpaid Interest with respect to the Principal prepaid shall be automatically                 cancelled as of the date of such prepayment.                          (d)   Definitions.  For the purpose of this Note, the following definitions shall                 apply:                              (i)   “Eligible Resale Date” means the earlier of (x) the thirtieth (30th)                       Trading Day after the first date on which the resale by the Buyers (as defined in the                       Securities Purchase Agreement) of all the Registrable Securities (as defined in the                       Registration Rights  Agreement) pursuant  to  one or more registration statements                       filed with the SEC has been declared effective by the SEC (and each prospectus                       contained therein is available for use on such date) or (y) the thirtieth (30th) Trading                       Day after the first date on which all of the Registrable Securities are eligible to be                       resold  by  the  Buyers  pursuant  to  Rule  144  (or, if  a  Current  Public  Information                       Failure  (as  defined  in  the  Registration  Rights  Agreement)  has  occurred  and  is                       continuing, such later date after which the Company has cured such Current Public                       Information Failure).                                (ii)  “Forced Mandatory Prepayment Eligible Amount” means, as of                       any given Forced Mandatory Prepayment Notice Date (as defined below), the lesser                       of  (A)  such  aggregate  amount  of  Principal  outstanding  hereunder  and  (B)  such                       aggregate amount of Principal hereunder that, together with the Unrestricted Note                       Amount (as defined in the Series B Note) as of such applicable Forced Mandatory                                              2  Error! Unknown document property name. 





 






                     Prepayment Notice Date would not exceed the lesser of (x) $5 million and (y) 10%                       of the quotient of (I) the sum of the Market Capitalization (as defined in the Series                       B  Notes) for  each  Trading  Day  during  the  thirty  (30) consecutive Trading  Day                       period ending on, and including, the Trading Day immediately prior to such Forced                       Mandatory Prepayment Notice Date, divided by (II) thirty (30).                              (iii) “Mandatory  Prepayment  Amount” means,  as  applicable,  any                       Mandatory  Prepayment  Conversion  Amount  (as  defined  below)  or  the  Forced                       Mandatory Prepayment Amount (as defined below).                              (iv)  “Mandatory  Prepayment  Event”  means,  as  applicable,  (i)  with                       respect to any Restricted Principal of the Series B Note designated to be converted                       in  a  Conversion  Notice (such  aggregate  amount  of  Principal  then  outstanding                       hereunder equal to such Restricted Principal of the Series B Note designated to be                       converted  in  such  Conversion  Notice,  each,  a  “Mandatory  Prepayment                       Conversion Amount”), both (A) the Company’s receipt of such Conversion Notice                       thereunder executed by the Investor in which all, or any part, of the principal of the                       Series B Note  to  be  converted  includes  any  Restricted  Principal  and  (B)  the                       Investor’s receipt from the Company of written confirmation that the Company’s                       transfer  agent  (the  “Transfer  Agent”)  has  been  irrevocably  instructed  by  the                       Company to deliver to the Investor (or its designee) the shares of Common Stock                       to be issued pursuant to such Conversion Notice in accordance with Section 3(c) of                       the Series B Note (in each case, as adjusted, if applicable, to reflect the withdrawal                       of any Conversion Notice, in whole or in part, by the Investor, whether pursuant to                       Section 3(c)(ii) of the Series B Note or otherwise), or (ii) at  any time after the                       Eligible Resale Date, so long as (v) the Market Capitalization (as defined in the                       Series B Notes) on each Trading Day during the thirty (30) consecutive Trading                       Day period ending on, and including, the Trading Day immediately prior to such                       applicable Mandatory Prepayment Date is at least $40 million, (w) the Available                       Shelf Capacity (as defined in the Series B Notes) on each Trading Day during the                       thirty (30) consecutive Trading Day period ending on, and including, the Trading                       Day immediately prior to such applicable Mandatory Prepayment Date is at least                       300%  of  the sum  of  (I)  the Unrestricted  Note  Amount as  of  each  such  date  of                       determination  and  (II)  the  aggregate  Forced  Mandatory  Prepayment  Amount                       pursuant  to  which  this  determination  is  being  made, (x)  no  Equity  Conditions                       Failure (as defined in the Series A Note or Series B Note) exists at any time during                       such applicable Forced Mandatory Prepayment Eligibility Period, (y) as of such                       date of determination, the quotient of (A) the sum of the VWAP of the Common                       Stock for each Trading Day during the twenty (20) consecutive Trading Day period                       ending as  of  the  Trading  Day  immediately  prior  to such  applicable Mandatory                       Prepayment Date, divided by (y) twenty (20) is greater than $1.30 (as adjusted for                       stock  splits,  stock  dividends,  stock combinations  recapitalizations  and  similar                       events) (the failure of the Company to satisfy this clause (y) as of the Mandatory                       Prepayment Date, if any, a “Minimum Price Failure”) and (z) no Event of Default                       (as defined in the Series A or Series B Note) has occurred prior to such Forced                       Mandatory  Prepayment  Eligibility  Period (regardless  of  whether  such  Event  of                       Default has been cured or the Holder has submitted an Event of Default Redemption                                              3  Error! Unknown document property name. 





 






                     Notice with respect thereto) (collectively, the “Forced Mandatory Prepayment                       Eligibility Conditions”), the Company shall have the right, by delivery of written                       notice to the Investor (each, a “Forced Mandatory Prepayment Notice”, and each                       such date, a “Forced Mandatory Prepayment Notice Date”) to require this Note                       to be prepaid (each, a “Forced Mandatory Prepayment”), in whole or in part, as                       of the tenth (10th) Trading Day after the applicable Forced Mandatory Prepayment                       Notice Date (or such other date as mutually agreed upon by the Investor and the                       Company,  each  a  “Forced  Mandatory  Prepayment  Date”,  and  such  period                       commencing on the applicable Forced Mandatory Prepayment Notice Date through                       and  including  such  Forced  Mandatory  Prepayment  Date,  each  a  “Forced                       Mandatory Prepayment Eligibility Period”), but the aggregate amount of such                       Forced  Mandatory  Prepayment  shall in  no  event exceed the  Forced  Mandatory                       Prepayment  Eligible  Amount (as  defined above) as  of  such Forced  Mandatory                       Prepayment  Notice  Date  (such  portion  of  the  applicable Forced Mandatory                       Prepayment Eligible Amount subject to such Forced Mandatory Prepayment, each                       a “Forced Mandatory Prepayment Amount”).  Notwithstanding the foregoing,                       (A)  the  Company  shall  not  be  permitted  to  effect  more  than  one  (1)  Forced                       Mandatory Prepayment in any thirty (30) Trading Day period (with the first Forced                       Mandatory Prepayment Notice Date eligible to be delivered to the Investor by no                       earlier than [      , 2020]1), (B) if at any time on or prior to such applicable Forced                       Mandatory  Prepayment  Date  any  Forced  Mandatory  Prepayment  Eligibility                       Condition fails to be satisfied in full, the Company shall deliver prompt written                       notice to the Investor and, unless the Investor waives such failure to satisfy such                       Forced  Mandatory  Prepayment  Eligibility  Condition,  such  Forced  Mandatory                       Prepayment Notice shall be null and void and no Forced Mandatory Prepayment                       shall occur hereunder with respect thereto and (C) the Investor (or its designee)                       shall not commence a Deposit/Withdrawal at Custodian with respect to such shares                       of Common Stock to be issued upon conversion of Restricted Principal unless and                       until the Investor shall have either (x) delivered the Mandatory Prepayment Amount                       to the Company or (y) delivered irrevocable instructions to the Investor’s bank,                       broker or other financial institution to wire the Mandatory Prepayment Amount to                       the Company from an account with at least an amount of cash or other Eligible                       Assets  (as  defined  below)  equal  to  the  Mandatory  Prepayment  Amount).                        Notwithstanding anything herein to the contrary, no Forced Mandatory Prepayment                       Notice may be delivered hereunder (and no Forced Mandatory Prepayment shall                       occur hereunder) at any time on or after March 31, 2021 (or such other date as the                       Investor and the Company may agree in writing).                              (v)   “Remaining Investor Note Principal Amount” means, as of any                       time of determination, the aggregate amount of Principal outstanding hereunder as                       of such time of determination.                                                1 Insert thirtieth (30th) Trading Day anniversary of the Closing Date                                              4  Error! Unknown document property name. 





 






                           (vi)  “Underlying Agreements” means, collectively, the Note Purchase                       Agreement,  the  Investor  Note,  the  Series  B  Notes  and  the  Securities  Purchase                       Agreement.                              (vii) “Unpaid  Amounts”  means,  as  of  any  date  of  determination,  the                       Obligations  owed  by  one  Party  to  the  other  under  such applicable Underlying                       Agreements that have not been paid as of the date of determination, whether or not                       such amounts are then due and payable and without regard to the fair market value                       of the Series B Note or the Investor Note at such time, as applicable.                    4.    Defaults.                        (a)   the Investor shall be deemed in default hereunder upon the occurrence of                 any of the following (a “Default”):                               (i)   Failure to Pay Principal or Interest.  The failure of the Investor to                       pay, when due, all or any part of any Principal  or Interest  required to  be made                       hereunder; or                              (ii)  Bankruptcy,  etc.   The  Investor  shall  have  entered  against  it  by  a                       court having jurisdiction thereof a decree or order for relief in respect to the Investor                       in an involuntary case under any applicable bankruptcy, insolvency or other similar                       law now or hereafter in effect, or a receiver, liquidator, assignee, custodian, trustee,                       sequestrator or other similar official shall be appointed for the Investor or for any                       substantial part of the Investor’s property, or the winding up or liquidation of the                       Investor’s  affairs  shall  have  been  ordered;  or  the  Investor  shall  commence  a                       voluntary case under any applicable bankruptcy, insolvency or other similar law                       now or hereafter in effect; or the Investor shall consent to the entry of an order for                       such relief in an involuntary case under any such law, or any such involuntary case                       shall commence, and not be dismissed within sixty (60) days; or the Investor shall                       consent  to  the  appointment  of  or  taking  possession  by  a  receiver,  liquidator,                       assignee, custodian, trustee, sequestrator or other similar official for the Investor or                       for any substantial part of the Investor’s property, or make any general assignment                       for the benefit of creditors.                        (b)   Consequence of Default.  Upon the occurrence of a Default, the outstanding                 Obligations hereunder shall, at the option of the Company, as evidenced by the delivery                 (or deemed delivery in accordance with this Section 4(c)) of written notice to the Investor,                 become immediately due and payable (each, an “Investor Note Acceleration”); provided,                 that any amount outstanding hereunder shall be subject to automatic Default Netting upon                 any  Investor  Note  Acceleration.  Notwithstanding  the  foregoing,  if  there  shall  occur  a                 Default under Section 4(a)(ii) above, the entire outstanding Obligations hereunder, shall                 automatically become immediately due and payable without any action on the part of the                 Company and the Company shall be deemed to have delivered a notice to the Investor                 electing an Investor Note Acceleration for the entire amount outstanding under this Note.                  Upon  the  payment,  in  full,  of  the  Remaining  Investor  Note  Principal  Amount  to  the                 Company  following  an  Investor  Note  Acceleration,  all  accrued  and  unpaid  Interest  (as                                              5  Error! Unknown document property name. 





 






               defined  in  the  Investor  Note)  then  outstanding  under  the  Investor  Note  shall  be                 automatically cancelled as of the date of such payment in full and, thereafter, the Investor                 Note shall be deemed to be paid in full and shall be null and void.  Upon the occurrence of                 a Default, the Company shall also have all the rights and remedies of a secured party on                 default under Article 9 of the Uniform Commercial Code of the State of New York with                 respect to the Collateral (as hereinafter defined).                  5.    Representations  and  Warranties  of  the  Investor.   The  Investor  represents  and           warrants  to  the Company as  follows as  of the date hereof: (a) the  Investor has  the power and           authority to execute, deliver and perform all obligations in accordance herewith; (b) the execution,           delivery and performance by the Investor of this Note are within the Investor's legal powers, and           do not contravene any law or any contractual restriction binding on or affecting the Investor; (c) no           authorization or approval or other action by, and no notice to or filing with, any governmental           authority or regulatory body is required for the due execution, delivery and performance by the           Investor  of  this  Note;  (d) this  Note  constitutes  the legal,  valid  and  binding  obligation  of  the           Investor,  enforceable  against  the  Investor  in  accordance  with  its  terms,  except  to  the  extent           enforceability is limited by bankruptcy, insolvency, fraudulent conveyance, moratorium and other           laws for the protection of creditors generally and by general equitable principles; and (e) there is           no pending or, to the Investor's knowledge, threatened action or proceeding affecting the Investor           before any governmental agency or arbitrator with respect to the transactions contemplated by this           Note  or  which  may  materially  adversely  affect  the  property,  assets  or  condition  (financial  or           otherwise) of the Investor.                  6.    Security.                          (a)   Grant of Security Interest.  As security for the due and prompt payment and                 performance  of  all  payment  obligations  under  this  Note  and  any  modifications,                 replacements and extensions hereof (collectively, “Secured Obligations”), the Investor                 hereby pledges and grants a security interest to the Company in all of the Investor’s right,                 title, and interest in and to, initially at least $16,000,000, in the aggregate, (i) in cash, (ii)                 cash equivalents, (iii) any Group of Ten (“G10”) currency and any notes or other securities                 issued by any G10 country and (iv) any securities of a special purpose acquisition company                 (each, a “SPAC”) that are redeemable for cash held in escrow by such SPAC  (with a                 deemed fair market value, for purposes hereof, equal to the amount of cash held in such                 escrow  for  redemption  of  such  applicable  security  of  such  SPAC) (collectively, the                 “Eligible Assets”), in each case, held by the Investor in the bank or brokerage accounts                 described on Schedule I attached hereto (the “Collateral”, and such account or accounts,                 as  applicable,  collectively,  the  “Collateral  Account”),  subject  to  reduction  upon  any                 reduction,  offset  or  cancellation  of  this  Note.   So  long  as  any  Restricted  Principal  (as                 defined in the Series B Note) remains outstanding under the Series B Note, the Investor                 shall  keep  Collateral  in  the  Collateral  Account  with  a  fair  market  value  of  at  least  the                 amount of Restricted Principal then outstanding.                          (b)   Change  in  Collateral  Account.   The  Investor  may,  with at  least  five  (5)                 Trading Days’ notice to the Company, move the Collateral from an account or accounts of                 the Investor to a new account or accounts (the “New Collateral Account”) at a financial                 institution  selected  by  the  Investor,  (but  if  such  financial institution  is  not  listed  as  a                                              6  Error! Unknown document property name. 





 






               permitted financial institution on Schedule II attached hereto, subject to the consent of the                 Company, not to be unreasonably withheld), and upon such move, such New Collateral                 Account shall be the Collateral Account for all purposes hereunder.                  7.    Netting Rights.                        (a)   Securities Contract.  The Company and the Investor hereby acknowledge                 and agree that the Securities Purchase Agreement and the Note Purchase Agreement each                 is a “securities contract” as defined in 11 U.S.C. § 741 and that Investor shall have all rights                 in  respect  of  the  Investor  Note,  the  Series B Note, the  Master  Netting  Agreement, the                 Securities Purchase Agreement and the Note Purchase Agreement as are set forth in 11                 U.S.C. § 555 and 11 U.S.C. § 362(b)(6), including, without limitation, all rights of credit,                 deduction, setoff, offset, recoupment, and netting (collectively, “Netting” or “Net”) as are                 available under this Note, the Series B Note and the Master Netting Agreement.                        (b)   Event of Default Netting.  Notwithstanding anything herein to the contrary,                 at any time on or after the occurrence of any Event of Default under the Series B Note                 (regardless of whether the Investor delivers an Event of Default Redemption Notice (as                 defined  in  the  Series  B Note)  to  the  Company  or  such  Event  of  Default  is subsequent                 cured), the Investor may, at its sole discretion, by written notice to the Company, Net (each,                 an “Event of Default Netting”) all, or any part, of the outstanding obligations under the                 Series B Note (and/or other Unpaid Amounts (as elected by the Investor in such written                 notice)) by the cancellation of such portion of the outstanding obligations under the Series                 B Note (and/or other Unpaid Amounts (as elected by the Investor in such written notice))                 as set forth in such written notice in exchange for the surrender and concurrent cancellation                 of an equal amount of Principal then outstanding hereunder (each, an “Event of Default                 Netting Principal Amount”).  Upon any Event of Default Netting, any accrued and unpaid                 Interest then outstanding hereunder with respect to such Event of Default Netting Principal                 Amount being satisfied in such Event of Default Netting shall be automatically cancelled                 as  of  the  date  of  such  Event  of  Default  Netting and,  thereafter,  such Event  of  Default                 Netting  Principal  Amount of this  Note (together  with  any  accrued  and  unpaid  Interest                 thereon then outstanding hereunder) shall be deemed to be paid in full.  Each Event of                 Default Netting shall be effective upon the date the Investor delivers notice to the Company                 of the Investor’s election to effect such Event of Default Netting.                        (c)   Automatic Netting at Redemption Date.  Notwithstanding anything herein                 to the contrary, with respect to any redemption of all, or any part, of the Series B Note,                 solely to the extent such portion of the Conversion Amount (as defined in the Series B                 Note) subject to such redemption includes Restricted Principal (as defined in the Series B                 Note) (such aggregate amount of Restricted Principal, each, a “Redemption Restricted                 Amount”), on the applicable Redemption Date (as defined in the Series B Note), such                 portion of the outstanding obligations under the Series B Note equal to such Redemption                 Restricted  Amount shall  automatically  Net (each, a  “Redemption  Netting”) by  the                 cancellation of the Redemption Restricted Amount of the outstanding obligations under the                 Series B Note in exchange for the surrender and concurrent cancellation of such portion of                 this  Note with  an  amount  of  aggregate  Principal  outstanding hereunder equal  to  such                 Redemption Restricted Amount (each a “Redemption Netting Principal Amount”) and                                              7  Error! Unknown document property name. 





 






               any  related  Restricted  OID  (as  defined  in  the  Series  B  Note)  shall  be  automatically                 cancelled in connection therewith.  Upon any Redemption Netting, any accrued and unpaid                 Interest  then  outstanding hereunder with  respect  to  such  Redemption  Netting  Principal                 Amount being cancelled in such Redemption Netting shall be automatically cancelled as                 of the date of such Redemption Netting and, thereafter, such Redemption Netting Principal                 Amount  of this  Note (together  with  any  accrued  and  unpaid  Interest  thereon  then                 outstanding hereunder) shall be deemed to be paid in full.  For the avoidance of doubt, if                 prior to the date of the applicable Redemption Netting all, or any portion, of a Redemption                 Restricted Amount becomes Unrestricted Principal (as defined in the Series B Note) or,                 with  respect  to  an  Installment  Amount  (as  defined  in  the  Series  B  Note),  subject  to  a                 Deferral (as defined in the Series B Note) or a waiver of an Equity Conditions Failure or                 such other event occurs whereafter such portion of the Redemption Restricted Amount is                 not required to be redeemed on the Redemption Date in accordance with the terms of the                 Series B Note (as amended, modified or waived on or prior to such date)(each a “Reversed                 Redemption  Restricted  Amount”),  solely  with  respect  to  such  Redemption  Date,  no                 Redemption  Netting  shall  occur  with  respect  to  such  Reversed  Redemption  Restricted                 Amount and any related Restricted OID shall not be cancelled in connection therewith.                        (d)   Automatic  Netting  Upon  any Bankruptcy  Event  of  Default.                  Notwithstanding anything herein to the contrary, upon any Bankruptcy Event of Default                 under the Series B Note, the Remaining Principal Amount as of such time of determination,                 such portion of the outstanding obligations under the Series B Note equal to the Remaining                 Investor Note Principal Amount shall automatically Net by the cancellation of such portion                 of the outstanding obligations under the Series B Note in exchange for the surrender and                 concurrent cancellation of this Note in its entirety (each, a “Bankruptcy Event of Default                 Netting”) and any related Restricted OID shall be cancelled in connection therewith.  For                 the avoidance of doubt, upon any Bankruptcy Event of Default Netting, all accrued and                 unpaid Interest then outstanding hereunder shall be automatically cancelled as of the date                 of such Bankruptcy Event of Default Netting and, thereafter, this Note shall be deemed to                 be paid in full and shall be null and void.  Each Bankruptcy Event of Default Netting shall                 be effective upon the date of the earliest occurrence of a Bankruptcy Event (as defined in                 the Series B Note) under the Series B Note.                        (e)   Automatic Netting Upon Prohibited Transfers of the Note.  Notwithstanding                 anything herein to the contrary, if for any reason, this Note or any interest herein is pledged,                 assigned or transferred to any Person other than the Company without the prior written                 consent of the Investor, whether by contract, operation of law, court order or otherwise                 (each, a “Prohibited Transfer”), such portion of the outstanding obligations under the                 Series B Note equal to 75% of the remaining Restricted Principal (as defined in the Series                 B Note) (together with any related Restricted OID with respect thereto) then outstanding                 under the Series B Note (with the remaining 25% of the Restricted Principal (together with                 any  related  Restricted  OID  with  respect  thereto) of  the  Series  B  Note  automatically                 becoming Unrestricted Principal (as defined in the Series B Note) thereunder) in exchange                 for the surrender and concurrent cancellation of the entire Investor Note.  For the avoidance                 of doubt, upon any Prohibited Transfer, all accrued and unpaid Interest then outstanding                 hereunder shall be automatically cancelled as of the date of such Prohibited Transfer and,                 thereafter, this Note shall be deemed to be paid in full and shall be null and void.                                              8  Error! Unknown document property name. 





 






                     (f)   Automatic Default  Netting.  Notwithstanding  anything  herein  to  the                 contrary, upon the occurrence of any Investor Note Acceleration (as defined in this Note),                 such portion of the outstanding obligations under the Series B Note equal to the Remaining                 Investor  Note  Principal  Amount (excluding  the  any  Forced  Mandatory  Prepayment                 Amount (unless the Company elects in writing to effect a Default Netting with respect                 thereto)) shall  automatically  Net  by  the  cancellation  of  such  portion  of  the Restricted                 Principal under the Series B Note (together with any related Restricted OID with respect                 thereto) in exchange for the surrender and concurrent cancellation of the entire Investor                 Note (each,  a  “Default  Netting”, and  together  with  the Bankruptcy  Event  of  Default                 Netting, Redemption  Netting and  Event  of  Default  Netting,  collectively,  the  “Netting                 Events”).  Each Default Netting shall occur on the date of such Investor Note Acceleration.                  For the avoidance of doubt, upon any Default Netting, all accrued and unpaid Interest then                 outstanding hereunder shall  be  automatically  cancelled  as  of  the  date  of  such  Default                 Netting.                        (g)   Netting  Events;  Single  Integrated  Transaction.   The  Company  hereby                 acknowledges and agrees that (i) the Netting Events shall be consummated at such times                 as  required  hereunder through  any  means  permissible  under  applicable  law,  including                 without limitation, set-off and Netting and (ii) the Obligations of the Investor hereunder                 and  the  obligations  of  the  Company  under  the  Series B Note issued  pursuant  to  the                 Securities Purchase Agreement arise in a single integrated transaction and constitute related                 and interdependent obligations within such transaction.                  8.    Miscellaneous.                        (a)   Full Recourse.  The parties hereby acknowledge and agree that this Note is                 a full recourse obligation of the Investor.                        (b)   No  Oral  Waivers  or  Modifications.   No  provision  of  this  Note  may  be                 waived or modified orally, but only in a writing signed by the Company and the Investor.                        (c)   Governing Law.  This Note shall be construed and enforced in accordance                 with,  and  all  questions  concerning  the  construction,  validity,  interpretation  and                 performance of this Note 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.  Each  party  hereto  hereby                 irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in                 the Borough of Manhattan in the City of New York, New York, 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.  Nothing contained herein shall                 be deemed to limit in any way any right to serve process in any manner permitted by law.                  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY                 HAVE  TO,  AND  AGREES  NOT  TO  REQUEST,  A  JURY  TRIAL  FOR  THE                                              9  Error! Unknown document property name. 





 






               ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR                 ARISING  OUT  OF  THIS  NOTE  OR  ANY  TRANSACTION  CONTEMPLATED                 HEREBY.                        (d)   No  Severability.   If  any  provision  of  this  Note  is  prohibited  by  law  or                 otherwise determined to be invalid or unenforceable by a court of competent jurisdiction                 or other similar authority (a “Severability Event”), this entire Note shall be automatically                 terminated and shall thereafter be null and void  and all remaining payment obligations                 hereunder of the Investor to the Company shall be automatically cancelled, ab initio.                        (e)   Currency.  Principal and interest due hereunder shall be payable in lawful                 money of the United States of America and shall be payable to the Company at the address                 of the Company, or at such other address as may be specified in a written notice to the                 Investor given by the Company.  The Company has provided the Investor with wire transfer                 instructions  pursuant  to  which  payments  may  be  made  under  this  Note  and  such  wire                 transfer instruction shall be valid for the entire period of this Note.                        (f)   Weekend; Holidays. If any payment on this Note shall become due on a                 Saturday, Sunday or a bank or legal holiday in the State of New York, such payment shall                 be made on the next succeeding business day in the State of New York.                        (g)   Usury.  If  interest payable under this Note is in excess of the maximum                 permitted  by  law,  the  interest  chargeable  hereunder  shall  be  reduced  to  the  maximum                 amount permitted by law and any excess over the maximum amount permitted by law shall                 be credited to the Principal balance of this Note and applied to the same and not to the                 payment of Interest.                        (h)   Remedies.                                (i)   No failure on the part of the Company to exercise, and no delay in                       exercising, any right, power or remedy hereunder shall operate as a waiver thereof;                       nor shall  any  single  or  partial  exercise  by  the  Company  of  any  right,  power  or                       remedy preclude any other or further exercise thereof or the exercise of any other                       right,  power or  remedy.  In addition,  the exercise of  any  right  or remedy of the                       Company at law or equity or under this Note shall not be deemed to be an election                       of Company’s rights or remedies under this Note or at law or equity.                              (ii)  No failure on the part of the Investor to exercise, and no delay in                       exercising, any right, power or remedy hereunder (including, without limitation,                       any Netting permitted hereunder) shall operate as a waiver thereof; nor shall any                       single or partial exercise by the Investor of any right, power or remedy preclude                       any other or further exercise thereof or the exercise of any other right, power or                       remedy. The remedies herein provided are cumulative and are not exclusive of any                       remedies provided by law. In addition, the exercise of any right or remedy of the                       Investor at law or equity or under this Note shall not be deemed to be an election                       of Investor’s rights or remedies under this Note or at law or equity.                                              10  Error! Unknown document property name. 





 






                     (i)   Waiver  of  Presentment.   The  Investor  hereby  waives  presentment,                 diligence, protest and demand, notice of protest, demand and dishonor and nonpayment of                 this Note.                                        [Signature Page Follows]                                              11  Error! Unknown document property name. 





 






               IN WITNESS WHEREOF, this Note has been executed as of the date first written above.                                                ALTO OPPORTUNITY MASTER FUND, SPC                                              - SEGREGATED MASTER PORTFOLIO B                                                                                                                                                                                            By: _________________________________                                                  Name:                                                   Title:                                                          Agreed and accepted as of            this ___ day of July, 2020 by:            PHUNWARE, INC.             By: _________________________________              Name:               Title:                                                                                             12  Error! Unknown document property name. 





 






                                                                                                         Schedule I                                                                                           Collateral Account                                                                   Bank:                  Bank Address:                 Account Number:                  Account Name:                                                                                                           Error! Unknown document property name. 





 






                                                                   Schedule II                                                                                         Permitted Financial Institutions                                                              Pershing LLC or any of their affiliates           HSBC NA, or any of their affiliates           BNP Paribas, or any of their affiliates           Wells Fargo or any of their affiliates           UBS AG or any of their affiliates           Citibank NA or any of their affiliates           Bank of America Merrill Lynch or any of their affiliates           Deutsche Bank, AG or any of their affiliates           Fidelity Investments, FMR LLC or any of their affiliates           Morgan Stanley or any of their affiliates           First Republic Bank or any of their affiliates    Error! Unknown document property name.