Document:

ex_199473.htm

Exhibit 10.4

 

PROMlSSORY NOTE

 

	$500,000	Brea, California
	 	August 11, 2020

 

FOR VALUE RECEIVED, and subject to the terms and conditions set forth herein, Mullen Technologies, Inc., a California corporation (hereinafter referred to as "Maker"), hereby unconditionally promises to pay to Net Element, Inc, a Delaware corporation (and together with its successors and assigns, hereinafter referred to as "Holder"), in the manner hereinafter provided, the aggregate principal sum of FIVE HUNDRED THOUSAND DOLLARS ($500,000) in immediately available funds and in lawful money of the United States of America, together with interest thereon, all in accordance with the provisions hereinafter specified.

 

I.    Funding. On the date hereof, Maker received the aggregate principal sum of FIVE HUNDRED THOUSAND DOLLARS ($500,000), from Holder. The amount funded hereunder and repaid may not be reborrowed.

 

2.    Accrual of Interest. Interest shall accrue and be computed on the principal amount outstanding under this Note until the same is repaid in full at a rate equal fourteen percent (14%) per annum compounding monthly. Interest shall be calculated hereunder on the basis of a 360-day year for the actual number of days elapsed. However, in no event will the interest rate exceed the maximum interest rate limitations under applicable law. Such interest shall be payable in cash upon demand.

 

3.    Payment of Interest. Maker shall pay interest on this Note on the Maturity Date (as hereafter defined) to Holder. Interest payable on this Note shall be paid on the Maturity Date in cash. During the continuance of an Event of Default, notwithstanding anything else to the contrary contained in this Note, interest payable on the outstanding principal hereunder shall bear interest at the then applicable interest rate set forth in the immediately preceding section plus thirteen percent (13%) per annum; provided, however, that such rate shall be increased or decreased to reflect the maximum interest rate permitted under applicable law. Such default interest shall be payable in cash upon demand.

 

4.    Maturity Date. The entire unpaid principal amount of this Note, together with all accrued unpaid interest, shall be due and payable on the earlier of (i) the date that certain Agreement and Plan of Merger, dated as of August 4, 2020, among Maker, Holder and Mullen Acquisition, Inc., a California corporation and a wholly-owned subsidiary of Holder (the "Merger Agreement") is terminated for any reason by any party thereto and (ii) theMerger Effective Time (as defined in the Merger Agreement) (the "Maturity Date") or, if earlier, the date on which this Note is declared due and payable pursuant to the terms of this Note, including without limitation as provided in Section 9 of this Note.

 

5.    Intentionally Omitted.

 

6.    Manner and Application of Payments. All amounts payable in cash hereunder shall be payable to Holder by wire transfer of immediately available funds and in lawful money of the United States of America without set-off, deduction or counterclaim at such place as Holder may from time to time designate in writing to Maker. Payments hereunder shall be applied first to interest and then to principal outstanding hereunder, except that if Holder has incurred any cost or expense in connection with the enforcement or collection of the obligations of Maker hereunder, Holder shall have the option of applying any monies received from Maker to payment of such costs or expenses plus interest thereon before applying any of such monies to any interest or principal then due. If any payment of principal or interest under this Note shall be payable on a day other than a business day such payment shall be made on the next succeeding business day and interest shall be payable at the rate specified in this Note during such extension. The books and records of Holder shall be the best evidence of any amounts at any time owed under this Note (including but not limited to principal, interest and any fees owed hereunder) and shall be conclusive absent manifest error.

 

7.     Representation and Warranties. Maker hereby represents and warrants to Holder that:

 

(i)     Maker is validly existing as a corporation under the laws of the State of California and has the power and authority to execute and deliver this Note and has duly executed and delivered this Note;

 

 

 

 

(ii)    this Note is the legal, valid and binding obligation of Maker, enforceable in accordance with its terms; 

 

(iii)   the execution, delivery and performance of this Note and the borrowing evidenced hereby does not (i) require the consent or approval of any other party (including any governmental or regulatory party), (ii) violate any law, regulation, agreement, order, writ, judgment, injunction, decree, determination or award presently in effect to which Maker is a party or to which Maker or any of its assets may be subject, or (iii) conflict with or constitute a breach of, or default under, or require any consent under, or result in the creation of any lien, charge or encumbrance upon the property or assets of Maker pursuant to any other agreement or instrument (other than any pledge of or security interest granted in any collateral pursuant to this Note) to which Maker is a party or is bound or by which its properties may be bound or affected; and (i) require the consent or approval of any other party (including any governmental or regulatory party), (ii) violate any law, regulation, agreement, order, writ, judgment, injunction, decree, determination or award presently in effect to which Maker is a party or to which Maker or any of its assets may be subject, or (iii) conflict with or constitute a breach of, or default under, or require any consent under, or result in the creation of any lien, charge or encumbrance upon the property or assets of Maker pursuant to any other agreement or instrument (other than any pledge of or security interest granted in any collateral pursuant to this Note) to which Maker is a party or is bound or by which its properties may be bound or affected; and

 

(iv)   there are no actions, suits, investigations or proceedings pending or, to the best of Maker's knowledge, threatened at law, in equity, in arbitration or by or before any other authority involving or affecting Maker that are likely to have a material adverse effect on the financial condition of Maker.

 

8.     Covenants.

 

(i)     Further Assurances. Maker shall execute, acknowledge and deliver, or cause to be executed, acknowledged or delivered, any and all such further assurances and other agreements or instruments, and take or cause to be taken all such other action, as shall be reasonably necessary from time to time to give full effect to the Note and the obligations hereunder.

 

(ii)    Maintenance of Existence. Maker shall preserve, renew and maintain in full force and effect its corporate or organizational existence and take all reasonable action to maintain all rights and privileges necessary or desirable in the ordinary course of business except as would not have a materially adverse effect.

 

(iii)   Notices of Defaults. As soon as possible and in any event within two (2) business days after Maker becomes aware of a Default or Event of Default under this Note, Maker shall notify Holder in writing of the nature and extent of such default or event of default and the action, if any, Maker has taken or proposes to take with respect to such default or event of default.

 

9.     Events of Default. Each of the following acts, events or circumstances shall constitute an Event of Default (each an "Event of Default") hereunder:

 

(i)     Maker shall default in the payment when due (in accordance with the terms of this Note) of any principal;

 

(ii)    Maker shall default in the payment when due (in accordance with the terms of this Note) of any interest or other amounts owing hereunder, and such default is not cured within three (3) business days of the due date;

 

(iii)   (a) Maker shall commence a voluntary case concerning itself under any bankruptcy, insolvency or similar laws or statutes (including Title 11 of the United States Code, as amended, supplemented or replaced) (collectively , the "Bankruptcy Code"); or (b) an involuntary case is commenced against Maker and is not dismissed within ninety (90) days; or (c) a custodian (as defined in the Bankruptcy Code) is appointed for, or takes charge of, all or substantially all of the property of Maker or Maker commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to Maker or there is commenced against Maker any such proceeding; or (d) any order of relief or other order approving any such case or proceeding is entered; or (e) Maker is adjudicated insolvent or bankrupt; or (f) Maker makes a general assignment for the benefit of creditors; or (g) Maker shall call a meeting of its creditors with a view to arranging a composition or adjustment of its debts; or (h) Maker shall by any act or failure to act consent to, approve of or acquiesce in any of the foregoing;

 

(iv)   Maker shall dissolve or for any reason cease to be in existence;

 

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(v)    any representation or warranty made or that is deemed made by Maker shall have been false or misleading in any material respect on the date as of which such representation or warranty was made or deemed made;

 

(vi)   Maker shall fail to perform or observe any agreement, covenant or obligation arising under any provision hereof for more than thirty (30) days following receipt by Maker of a notice from Holder indicating any such violation;

 

(vii)  Maker shall default on any other indebtedness, whether such indebtedness is owed to Holder or a third party;

 

(viii) Maker shall breach or default on, as applicable, any of its representations, warranties, covenants and/or agreements set forth in the Merger Agreement; and

 

(ix)   any material adverse effect shall occur with respect to (a) the validity or enforceability of this Note or the rights, powers and privileges purported to be created hereby, (b) the right rights and remedies of the Holder hereunder, (c) Maker's ability to perform any of its obligations hereunder, or (d) the business, assets, properties, liabilities (actual or contingent), operations or condition (financial or otherwise) of Maker.

 

If an Event of Default, other than an Event of Default described in clause (iii) of this section, occurs, Holder by written notice to Maker may declare the principal of and accrued interest on this Note to be immediately due and payable. Upon a declaration of acceleration, such principal and interest shall become immediately due and payable. If an Event of Default described in clause (iii) of this Section occurs, the principal of and accrued interest on this Note then outstanding shall become immediately due and payable without any declaration or other act on the part of Holder.

 

As used herein, the term "Default" means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

 

10.  Remedies; Cumulative Rights. In addition to the rights provided under the immediately preceding Section, Holder shall also have any other rights that Holder may have been afforded under any contract or agreement at any time, and any other rights that Holder may have pursuant to applicable law. No delay on the part of Holder in the exercise of any power or right under this Note or under any other instrument executed pursuant hereto shall operate as a waiver thereof, nor shall a single or partial exercise of any power or right preclude other or further exercise thereof or the exercise of any other power or right. No extension of time of the payment of this Note or any other modification, amendment or forbearance made by agreement with any person now or hereafter liable for the payment of this Note shall operate to release, discharge, modify, change or affect the liability of any co-borrower, endorser, guarantor or any other person with regard to this Note, either in part or in whole. No failure on the part of Holder or any holder hereof to exercise any right or remedy hereunder, whether before or after the occurrence of a default, shall constitute a waiver thereof, and no waiver of any past default shall constitute a waiver of any future default or of any other default. No failure to accelerate the debt evidenced hereby by reason of an Event of Default hereunder or acceptance ofa past due installment, or indulgence granted from time to time shall be construed to be a waiver of the right to insist upon prompt payment thereafter, or to impose late payment charges, or shall bedeemed to bea novation of this Note or any reinstatement of the debt evidenced hereby, or a waiver of such right of acceleration or any other right, or be construed so as to preclude the exercise of any right which Holder or any holder hereof may have, whether by the laws of the State of Florida, by agreement or otherwise, and none of the foregoing shall operate to release, change or affect the liability of Maker under this Note, and Maker hereby expressly waives (to the extent allowed by law) the benefit of any statute or rule of law or equity which would produce a result contrary to or in conflict with the foregoing.

 

I I.   Attorneys' Fees. Maker agrees to pay all costs and expenses of collection and enforcement of this Note when incurred, including Holder' s reasonable attorneys' fees and legal and court costs, including any incurred on appeal or in connection with bankruptcy or insolvency, whether or not any lawsuit or proceeding is ever filed with respect hereto.

 

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12.  Waivers. Except for the notices expressly required by the terms of this Note (which rights to notice are not waived by Maker), Maker, for itself and its successors and assigns, hereby forever waives presentment, protest and demand, notice of protest, demand, dishonor and non-payment of this Note, and all other notices in connection with the delivery, acceptance, performance, default or enforcement of the payment of this Note, and waives and renounces (to the extent allowed by law), all rights to the benefits of any statute of limitations and any moratorium, appraisement, and exemption now allowed or which may hereby be provided by any federal or state statute or decisions against the enforcement and collection of the obligations evidenced by this Note and any and all amendments, substitutions, extensions, renewals, increases, and modifications hereof. Maker expressly agrees that this Note may be extended or subordinated, by forbearance or otherwise, from time to time, without in any way affecting the liability of Maker. No consent or waiver by Holder with respect to any action or failure to act which without such consent or waiver would constitute a breach of any provision of this Note shall be valid or binding unless in writing signed by Holder and then only to the extent expressly specified therein. Neither the failure nor any delay in exercising any right, power or privilege under this Note, at law or equity, or otherwise available agreement, will operate as a waiver of such right, power or privilege and no single or partial exercise of any such right, power or privilege by Holder will preclude any other or further exercise of such right, power or privilege.

 

13.  Notices. Any notices required or permitted to be given under the terms of this Note shall be sent or delivered personally or by courier (including a recognized, receipted overnight delivery service) or by facsimile (with a copy sent by a recognized, receipted overnight delivery service) and shall be effective upon receipt, if delivered personally or by courier (including a recognized overnight delivery service) or by facsimile, in each case addressed to Maker or Holder. The addresses for such communications shall be:

 

Ifto Maker:

 

Mullen Technologies, Inc.

1405 Pioneer Street

Brea, California 9282l Attention: David Michery, CEO

Email: david@mullenusa.com

 

Ifto Holder:

 

Net Element, Inc.

3363 NE 163rd St., Suite 705 North Miami Beach, Florida 33160

Attention: Oleg Firer, CEO and Steven Wolberg, Chief Legal Officer

Email: ofirer@netelement.com and swolberg@netelement.com

 

Maker or Holder shall provide notice to the other of any change in its address.

 

14.   Usury. All terms, conditions and agreements herein are expressly limited so that in no contingency or event whatsoever, whether by acceleration of maturity of the unpaid principal balance hereof, or otherwise, shall the amount paid or agreed to be paid to Holder for the use, forbearance or detention of the money advanced hereunder exceed the highest lawful rate permissible under applicable laws. If, from any circumstances whatsoever, fulfillment of any provision hereof shall involve transcending the limit of validity prescribed by law which a court of competent jurisdiction, in a final determination may deem applicable hereto, then ipso facto, the obligation to be fulfilled shall be reduced to the limit of such validity, and if under any circumstances Holder shall ever receive as interest an amount which would exceed the highest lawful rate, such amount which would be excessive interest shall be applied to reduction of the unpaid principal balance due hereunder and not to the payment of interest.

 

15.   Severability; Invalidity. Maker and Holder intend and believe that each provision in this Note comports with all applicable local, state and federal laws and judicial decisions. However, if any provisions, provision, or portion of any provision in this Note is found by a court of competent jurisdiction to be in violation of any applicable local, state or federal ordinance, statute, law, or administrative or judicial decision, or public policy, including applicable usury laws, and if such court would declare such portion, provision or provisions of this Note to be illegal, invalid, unlawful, void or unenforceable as written, then it is the intent of all parties hereto that such portion, provision or provisio ns shall be given force and effect to the fullest possible exte:t they are legal, valid and enforceable, and the remainder/ of this Note shall be construed as if such illegal, invalid, unlawful, void or unenforceable portion, provision or provisions were severable and not contained herein , and the rights, obligations and interest of Maker and Holder under the remainder of this Note shall continue in full force and effect.

 

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16.   No Strict Construction. The language used in this Note shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction shall be applied against any party.

 

17.   Assignment. Maker may not transfer, assign or delegate any of its rights or obligations hereunder without the prior written consent of Holder. Holder shall have the right, without the consent of Maker, to transfer or assign, in whole or in part, its rights and interests in and to this Note, and, as used herein, the term " Holder" shall mean and include such successors and assigns. This Note shall accrue to the benefit of Holder and its successors and assigns and shall be binding upon the undersigned and its successors and assigns.

 

18.   Amendment. The provisions of this Note may be amended only by a written instrument signed by Maker and Holder.

 

19.   Governing Law. THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF ALL PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF FLORIDA WITHOUT REFERENCE TO THAT STATE'S RULES REGARDING CHOICE OF LAW.

 

20.   Jurisdiction; Waiver of Jury Trial. ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS NOTE SHALL BE FILED, TRIED AND LITIGATED IN THE STATE AND FEDERAL COURTS LOCATED IN MIAMI-DADE COUNTY, FLORIDA. MAKER VOLUNTARILY WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR IN CONNECTION WITH THIS NOTE OR ANY OTHER DOCUMENT RELATED HERETO, OR THE TRANSACTIONS OR OBLIGATIONS UNDER WHICH THIS NOTE WAS DELIVERED, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY PARTY RELATING TO THIS NOTE, INCLUDING CONTRACT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. MAK.ER HAS REVIEWED THIS WAIVER AND KNOWINGLY AND VOLUNTARILY WAIVES THE AFORESAID TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS NOTE MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

21.   Counterparts. This Note may be executed in any number of counterparts, each of which when executed, shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument binding upon all of the parties hereto notwithstanding the fact that all parties are not signatory to the original or the same counterpart.

 

 

[Remainder Of Page Intentionally Left Blank; Signature Page Follows]

 

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EXECUTED AND DELIVERED as of the first date written above.

 

	
			MAKER:

				
			MULLEN TECHNOLOGIES, INC.

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			 

				
			 

			
	
			 

				
			Name:

				
			 

				
			 

			
	
			 

				
			Title:

				
			 

				
			 

			
	 	 	 	 
	 	 	 	 
	 	 	 	 
	ACKNOWLEDGED:	NET ELEMENT, INC.	 
	 	 	 	 
	 	 	 	 
	 	By:	 	 
	 	Name:	Oleg Firer	 
	 	Title:	CEOExhibit 4.2

 

NEITHER THIS WARRANT NOR THE SECURITIES
ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUBJECT TO SECTION 7
BELOW, NO SALE OR DISPOSITION MAY BE EFFECTED EXCEPT IN COMPLIANCE WITH RULE 144 UNDER SAID ACT OR WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR HOLDER, SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED
UNDER THE ACT OR RECEIPT OF A NO ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION.

 

COMMON STOCK PURCHASE WARRANT

 

DECISIONPOINT SYSTEMS, INC.

 

Warrant Shares: ________

 

THIS CERTIFIES THAT,
for value received, ___________(“Holder”) is entitled to subscribe for and purchase up to [***] Common Shares
(as hereinafter defined) of DecisionPoint Systems, Inc., a Delaware corporation (the “Company”), at the Exercise
Price (as hereinafter defined), subject to the provisions and upon the terms and conditions hereinafter set forth. As used herein,
the term “Common Shares” shall mean the common stock, par value $0.001 per share, of the Company, and the term “Warrant
Shares” shall mean the Common Shares which Holder may acquire pursuant to this Warrant.

 

1. Exercise
Price. The “Exercise Price” shall initially be Fifty Cents ($***) per Common Share, subject to adjustment
as provided in Section 4 below.

 

2. Conditions
to Exercise. The purchase right represented by this Warrant may be exercised at any time, or from time to time, in whole or
in part during the term commencing on the date hereof and ending at 5:00 P.M. Eastern Standard time on the fifth anniversary of
the date of this Warrant (the “Expiration Date”).

 

3. Method
of Exercise or Conversion; Payment; Issuance of Warrant Shares; Issuance of New Warrant.

 

(a) Cash
Exercise. Subject to Section 2 hereof, the purchase right represented by this Warrant may be exercised by the Holder
hereof, in whole or in part, by (i) delivery of a written notice, in the form attached hereto as Exhibit A (the “Exercise
Notice”), of the Holder’s election to exercise this Warrant and (ii) (A) payment to the Company of an amount equal
to the applicable Exercise Price multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the “Aggregate
Exercise Price”) in cash by certified or bank check, or wire transfer of immediately available funds or (B) if the provisions
of Section 3(b) are applicable, by notifying the Company that this Warrant is being exercised pursuant to a Cashless Exercise (as
defined in Section 3(b)). No ink-original Exercise Notice shall be required, nor shall any medallion guarantee (or other type of
guarantee or notarization) of any Exercise Notice be required. The Holder shall not be required to deliver the original Warrant
in order to effect an exercise hereunder. Execution and delivery of the Exercise Notice with respect to less than all of the Warrant
Shares shall have the same effect as cancellation of the original Warrant and issuance of a new Warrant evidencing the right to
purchase the remaining number of Warrant Shares. In the event of any exercise of the rights represented by this Warrant, the ownership
of the Common Shares shall be recorded on the books and records of the Company in the Holder’s name or in the manner as the
Holder may so direct. Unless this Warrant has been fully exercised or expired, a new Warrant having terms and conditions substantially
identical to this Warrant and representing the portion of the Warrant Shares, if any, with respect to which this Warrant shall
not have been exercised, shall also be issued to the Holder hereof within ten (10) days after exercise of this Warrant.

 

    

     

    

 

(b) Cashless
Exercise. In lieu of exercising this Warrant as specified in Section 3(a), the Holder may from time to time convert
this Warrant, in whole or in part, into Warrant Shares by surrender of a duly executed Notice of Exercise in substantially the
form attached hereto at the principal office of the Company, in which event the Company shall issue to the Holder the number of
Warrant Shares computed using the following formula:

 

X = Y (A - B)

            A

 

Where:

 

X = the number of Warrant Shares
to be issued to the Holder under this Section 3(b).

 

Y = the number of Warrant Shares
purchasable under this Warrant (at the date of such calculation).

 

A = the Fair Market Value of
one Common Share (at the date of such calculation).

 

B = Exercise Price (as adjusted
to the date of such calculation).

 

Prior to the Holder (or it designee) being
recorded on the books and records of the Company as the holder of the Warrant Shares, pursuant to this Section 3(b), the
Holder shall deliver to the Company the Joinder Agreement.

 

(c) Fair
Market Value. For purposes of this Section 3, Fair Market Value of one Common Share shall mean:

 

(i) In
the event of an exercise in connection with an initial public offering, the per unit Fair Market Value for the Common Shares shall
be the offering price at which the underwriters initially sell Common Shares to the public; or

 

(ii) The
average of the closing bid and asked prices of Common Shares quoted in the Over The Counter Market Summary, the last reported sale
price quoted on the Nasdaq Stock Market or on any other exchange on which the Common Shares are listed, whichever is applicable,
as published in the Eastern Edition of the Wall Street Journal for the three (3) trading days prior to the date of determination
of Fair Market Value; or

 

(iii) In
the event of an exercise in connection with a merger, acquisition or other consolidation in which the Company is not the surviving
entity, the per unit Fair Market Value for the Common Shares shall be the value to be received per Common Share by all holders
of the Common Shares in such transaction as determined by the Company’s Board of Directors (the “Board”);
or

 

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(iv) In
any other instance, the per unit Fair Market Value for the Common Shares shall be as determined in the reasonable good faith judgment
of the Board.

 

In the event of 3(c)(iii) or 3(c)(iv)
above, the Board shall prepare a certificate, to be signed by an authorized officer of the Company, setting forth in reasonable
detail the basis for and method of determination of the per unit Fair Market Value of the Common Shares. The Board will also certify
to the Holder that this per share Fair Market Value will be applicable to all holders of the Common Shares. Such certification
must be made to the Holder at least twenty (20) business days prior to the proposed effective date of the merger, consolidation,
sale or other triggering event.

 

4. Certain Adjustments.

 

(a) Stock
Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise
makes a distribution of capital stock in respect of its Common Stock, (ii) subdivides outstanding shares of Common Stock into a
larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller
number of shares or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then
in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common
Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number
of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant
shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment
made pursuant to this Section 4(a) shall become effective immediately after the record date for the determination of stockholders
entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of
a subdivision, combination or re-classification.

 

(b) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 4(a) above, if at any time the Company grants, issues
or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record
holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to
acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired
if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant immediately before
the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase
Rights.

 

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(c) Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related
transactions effects any merger or consolidation of the Company with or into another Person (as defined below), (ii) the Company,
directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially
all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange
offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell,
tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the
outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification,
reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more
related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other
Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held
by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to,
such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then,
upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have
been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder,
the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation,
and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental
Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such
Fundamental Transaction. For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted
to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in
a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder
shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental
Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor
(the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant and the
other Transaction Documents in accordance with the provisions of this Section 4(c) pursuant to written agreements and shall, at
the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a
written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number
of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable
and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such
Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock
(but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value
of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting
the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably
satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity
shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this
Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity),
and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant
and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein. “Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind

 

    4

     

    

 

(d) Price
Adjustments. Whenever the number of Warrant Shares purchasable upon exercise of this Warrant is adjusted pursuant to Sections
4(a), 4(b) or 4(c), the then applicable Exercise Price shall be proportionately adjusted.

 

(e) Certain
Shares Excluded. The number of shares of Common Stock outstanding at any given time for purposes of the adjustments set forth
in this Section 4 shall exclude any shares then directly or indirectly held in the treasury of the Company.

 

(f) Deferral
and Cumulation of De Minimis Adjustments. The Company shall not be required to make any adjustment pursuant to this Section
4 if the amount of such adjustment would be less than one percent (1%) of the Exercise Price in effect immediately before the event
that would otherwise have given rise to such adjustment. In such case, however, any adjustment that would otherwise have been required
to be made shall be made at the time of and together with the next subsequent adjustment which, together with any adjustment or
adjustments so carried forward, shall amount to not less than one percent (1%) of the Exercise Price in effect immediately before
the event giving rise to such next subsequent adjustment. All calculations under this Section 4 shall be made to the nearest cent
or to the nearest one-hundredth of a share, as the case may be, but in no event shall the Company be obligated to issue fractional
Warrant Shares or fractional portions of any securities upon the exercise of the Warrant.

 

(g) Duration
of Adjustment. Following each computation or readjustment as provided in this Section 5, the new adjusted Exercise Price and
number of Warrant Shares purchasable upon exercise of this Warrant shall remain in effect until a further computation or readjustment
thereof is required.

 

5. Notice
to Holders.

 

(a) Notice
of Record Date. In case:

 

(i) the
Company shall take a record of the holders of its Common Stock (or other stock or securities at the time receivable upon the exercise
of this Warrant) for the purpose of entitling them to receive any dividend (other than a cash dividend payable out of earned surplus
of the Company) or other distribution, or any right to subscribe for or purchase any shares of stock of any class or any other
securities, or to receive any other right;

 

(ii) of
any capital reorganization of the Company, any reclassification of the capital stock of the Company, any consolidation with or
merger of the Company into another corporation, or any conveyance of all or substantially all of the assets of the Company to another
corporation; or

 

    5

     

    

 

(iii) of
any voluntary dissolution, liquidation or winding-up of the Company;

 

then, and in each such case, the Company
will mail or cause to be mailed to the Holder hereof at the time outstanding a notice specifying, as the case may be, (i) the date
on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character
of such dividend, distribution or right, or (ii) the date on which such reorganization, reclassification, consolidation, merger,
conveyance, dissolution, liquidation or winding-up is to take place, and the time, if any, is to be fixed, as of which the holders
of record of Common Stock (or such stock or securities at the time receivable upon the exercise of this Warrant) shall be entitled
to exchange their shares of Common Stock (or such other stock or securities) for securities or other property deliverable upon
such reorganization, reclassification, consolidation, merger, conveyance, dissolution or winding-up.

 

(b) Certificate
of Adjustment. Whenever any adjustment shall be made pursuant to Section 4 hereof, the Company shall promptly provide the Holder
with prompt written notice, signed and certified by its Chairman, Chief Executive Officer, President or a Vice President, setting
forth in reasonable detail the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment
was calculated and the Exercise Price and number of Warrant Shares purchasable upon exercise of this Warrant after giving effect
to such adjustment.

 

6. Representations
and Warranties.

 

(a) Representations
and Warranties by the Company. The Company hereby represents and warrants to the Holder that the statements in the following
paragraphs of this Section 6(a) are true and correct (a) as of the date hereof and (b) except where any such representation
and warranty relates specifically to an earlier date, as of the date of any exercise of this Warrant.

 

(i) Company
Organization and Authority. The Company (a) is a corporation duly incorporated, validly existing, and in good standing in its
jurisdiction of its incorporation, (b) has the corporate power and authority to own and operate its properties and to carry on
its business as now conducted and as proposed to be conducted; and (c) is qualified as a foreign corporation in all jurisdictions
where such qualification is required.

 

(ii) Corporate
Power. The Company has all requisite legal and company power and authority to execute, issue and deliver this Warrant, to issue
the Warrant Shares issuable upon exercise or conversion of this Warrant, and to carry out and perform its obligations under this
Warrant and any related agreements.

 

(iii) Authorization;
Enforceability. All corporate action on the part of the Company, its officers, directors and stockholders necessary for the
authorization, execution, delivery and performance of its obligations under this Warrant and for the authorization, issuance and
delivery of this Warrant and the Warrant Shares issuable upon exercise of this Warrant has been taken and this Warrant constitutes
the legally binding and valid obligation of the Company enforceable in accordance with its terms.

 

(iv) Reservation
of Shares; Valid Issuance. The Company hereby agrees that at all times there shall be reserved for issuance upon the exercise
of this Warrant such number of shares of the Common Stock as shall be required for issuance upon exercise of this Warrant. This
Warrant has been validly issued and is free of restrictions on transfer other than restrictions on transfer set forth herein and
under applicable state and federal securities laws. The Company further agrees that all Warrant Shares will be duly authorized
and will, upon issuance and payment of the exercise price therefor, be validly issued, fully paid and non-assessable, free from
all taxes, liens, charges and encumbrances with respect to the issuance thereof, other than taxes, if any, in respect of any transfer
occurring contemporaneously with such issuance and other than transfer restrictions imposed by federal and state securities laws.
this Warrant.

 

    6

     

    

 

(v) No
Conflict. The execution, delivery, and performance of this Warrant will not result in (a) any violation of, be in conflict
with, or constitute a default under, with or without the passage of time or the giving of notice (1) any provision of the Company’s
Certificate of Incorporation or Stockholders Agreement; (2) any provision of any judgment, decree, or order to which the Company
is a party, by which it is bound, or to which any of its material assets are subject; (3) any contract, obligation, or commitment
to which the Company is a party or by which it is bound; or (4) any statute, rule, or governmental regulation applicable to the
Company, or (b) the creation of any lien, charge or encumbrance upon any assets of the Company.

 

7. Transfer, Division
and Combination.

 

(a) Subject
to compliance with any applicable securities laws and the conditions set forth in Sections 2 and 7(e) hereof, this Warrant and
all rights hereunder are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company,
together with a written transfer of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent
or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if
required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the transferee or transferees
and in the denomination or denominations specified in such instrument of transfer, and shall issue to the transferor a new Warrant
evidencing the portion of this Warrant not so transferred, and this Warrant shall promptly be cancelled. A Warrant, if properly
transferred, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

 

(b)  This
Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together
with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its
agent or attorney. Subject to compliance with Section 7(a), as to any transfer which may be involved in such division or combination,
the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined
in accordance with such notice.

 

(c)  The
Company shall prepare, issue and deliver at its own expense (other than transfer taxes) the new Warrant or Warrants under this
Section 7.

 

(d)  The
Company agrees to maintain, at its aforesaid office, books for the registration and the registration of transfer of the Warrants.

 

(e) 
If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant
shall not be registered pursuant to an effective registration statement under the Securities Act of 1933 (as amended, the “Securities
Act”) and under applicable state securities or blue sky laws, the Company may require, as a condition of allowing
such transfer (i) that the Holder or transferee of this Warrant, as the case may be, furnish to the Company a written opinion of
counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions and reasonably
satisfactory to the Company) to the effect that such transfer may be made without registration under the Securities Act and under
applicable state securities or blue sky laws, (ii) that the holder or transferee execute and deliver to the Company an investment
letter in form and substance reasonably acceptable to the Company and (iii) that the transferee be an “accredited investor”
as defined

 

    7

     

    

 

8. “Market
Stand-Off” Agreement. The Holder hereby agrees that it will not, without the prior written consent of the managing underwriter,
during the period commencing on the date of the final prospectus relating to the Company’s initial public offering and ending
on the date specified by the Company and the managing underwriter (such period not to exceed one hundred eighty (180) days from
such prospectus date) (i) lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly,
any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock of the Company (whether
such shares or any such securities are then owned by the Holder or are thereafter acquired), or (ii) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such Common
Stock, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of common stock or
such other securities, in cash or otherwise. The underwriters in connection with the Company’s initial public offering are
intended third party beneficiaries of this Section 8 and shall have the right, power and authority to enforce the provisions
hereof as though they were a party hereto. In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions
with respect to any shares of Company capital stock of the Holder (and the shares or securities of every other person subject to
the foregoing restriction) until the end of such period.

 

9. No
Fractional Shares. No fractional unit of any Warrant Share will be issued in connection with any exercise or conversion hereunder,
but in lieu of such fractional share, the Company shall make a cash payment therefor upon the basis of the Exercise Price then
in effect.

 

10. Charges,
Taxes and Expenses. Issuance of certificates for units of Common Shares upon the exercise or conversion of this Warrant shall
be made without charge to the Holder for any United States or state of the United States documentary stamp tax or other incidental
expense with respect to the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such
certificates shall be issued in the name of the Holder.

 

11. No
Stockholder Rights Until Exercise. The Holder of this Warrant, as such, shall not be entitled by reason of this Warrant to
any rights whatsoever as a stockholder of the Company, including but not limited to voting rights. No provision hereof, in the
absence of any affirmative action by Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the
rights or privileges of Holder, shall give rise to any liability of Holder for the purchase price of any Common Stock or as a stockholder
of the Company, whether such liability is asserted by the Company or by creditors of the Company.

 

    8

     

    

 

12. Registry
of Warrant. The Company shall maintain a registry showing the name and address of the registered Holder of this Warrant. This
Warrant may be surrendered for exchange or exercise, in accordance with its terms, at such office or agency of the Company, and
the Company and the Holder shall be entitled to rely in all respects, prior to written notice to the contrary, upon such registry.

 

13. Loss,
Theft, Destruction or Mutilation of Warrant. Upon receipt by the Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant, and, in the case of loss, theft, or destruction, of indemnity reasonably satisfactory
to it, and, if mutilated, upon surrender and cancellation of this Warrant, the Company will execute and deliver a new Warrant,
having terms and conditions substantially identical to this Warrant, in lieu hereof.

 

14. Miscellaneous.

 

(a) Issue
Date. The provisions of this Warrant shall be construed and shall be given effect in all respect as if it had been issued and
delivered by the Company on the date hereof.

 

(b) Successors.
This Warrant shall be binding upon any successors or assigns of the Company.

 

(c) Headings.
The headings used in this Warrant are used for convenience only and are not to be considered in construing or interpreting this
Warrant.

 

(d) Saturdays,
Sundays, Holidays. If the last or appointed day for the taking of any action or the expiration of any right required or granted
herein shall be a Saturday or a Sunday or shall be a legal holiday in the State of Delaware, then such action may be taken or such
right may be exercised on the next succeeding day not a legal holiday.

 

15. No
Impairment. The Company will not, by any voluntary action, avoid or seek to avoid the observance or performance of any of the
terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all
such action as may be necessary or appropriate in order to protect the rights of the Holder hereof against impairment.

 

16. Addresses.
Any notice required or permitted hereunder shall be in writing and shall be mailed by overnight courier, registered or certified
mail, return receipt requested, and postage prepaid, or otherwise delivered by hand or by messenger, addressed as set forth below,
or at such other address as the Company or the Holder hereof shall have furnished to the other party in accordance with the delivery
instructions set forth in this Section16.

 

	If to Company: 	DecisionPoint Systems, Inc.

8697 Research
Drive

Irvine, CA
92618

 

	If to the Holder:	To his,
her or their address in the Company’s books and records.

 

If mailed by registered or certified mail,
return receipt requested, and postage prepaid, notice shall be deemed to be given two (2) days after being sent, and if sent by
overnight courier, by hand or by messenger, notice shall be deemed to be given when delivered (if on a business day, and if not,
on the next business day).

 

    9

     

    

 

17. WAIVER
OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS WARRANT
OR THE WARRANT SHARES.

 

18. GOVERNING
LAW. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.

 

[Signature Page Follows]

 

    10

     

    

 

IN WITNESS WHEREOF,
the Company has caused this Warrant to be executed by its officer thereunto duly authorized.

 

	 	DECISIONPOINT SYSTEMS, INC.,
	 	a Delaware corporation
	 	 	 
	 	By:	                                                
	 	Name:	 
	 	Title:	 

 

[SIGNATURE PAGE TO WARRANT]

 

    

     

    

 

NOTICE OF EXERCISE

 

		To:	DecisionPoint Systems, Inc.

_____________________

_____________________

_____________________

 

		1.	The undersigned Warrant holder (“Holder”) elects to acquire Common Shares of
DecisionPoint Systems, Inc. (the “Company”), pursuant to the terms of the Warrant dated _______ __, 20xx (the
“Warrant”).

 

		2.	The Holder exercises its rights under the Warrant as set forth below:

 

(      ) The
Holder elects to purchase _____________ Common Shares as provided in Section 3(a) of the Warrant and tenders herewith a
check in the amount of $___________ as payment of the purchase price.

 

(      ) The
Holder elects to convert the purchase rights into Common Shares as provided in Section 3(b) of the Warrant.

 

The Holder represents that it is acquiring
the aforesaid Common Shares for investment and not with a view to or for resale in connection with distribution and that the Holder
has no present intention of distributing or reselling the shares.

 

Please register the Common Shares on the
books and records of the Company in the name of the Holder or in such other name as is specified below:

 

	 	Name:	 	 
	 	 	 	 
	 	Address:	 	 
	 	 	 	 
	 	Taxpayer I.D.:	 	 

 

	 	[NAME OF HOLDER]
	 	 	 
	 	By:	                                          
	 	 	 
	 	Name:	 
	 	 	 
	 	Title:	 
	 	 	 
	 	Date:	 

 

    

     

    

 

ASSIGNMENT FORM

 

(To assign the foregoing warrant, execute

this form and supply required information.

Do not use this form to exercise the
warrant.)

 

FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto

 

_____________________________________________________________________

 

_____________________________________________________________________

 

_____________________________________________________________________

(name and address of assignee must be printed
or typewritten)

 

the within Warrant,
hereby irrevocably constituting and appointing attorney to transfer said Warrant on the books of the Company with full power of
substitution in the premises.

 

	 	Dated:	                                  	 
	 	 	 	 
	 	Name of Warrant holder or Assignee:	 
	 	 	 
	 	 	 	 
	 	(please print)	 
	 	 	 	 
	 	Address:	 	 
	 	 	 
	 	 	 
	Signature:  	 	 
	 	SIGNATURE OF REGISTERED HOLDER	 

 

NOTE: The signature to
this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement
or any change whatsoever. Officers of corporations and those acting in a fiduciary or other representative capacity should file
proper evidence of authority to assign the foregoing Warrant.

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