Document:

Exhibit 10.3

 

[COMPANY LETTERHEAD]

 

June __, 2019

[BUYER]

[BUYER ADDRESS]

Attention: [             ]

 

Dear Sirs:

 

This agreement (the
 “Leak-Out Agreement”) is being delivered to you in connection with that certain understanding by and among Senmiao
Technology Limited, a Nevada corporation with headquarters located at 16F, Shihao Square, Middle Jiannan Blvd., High-Tech Zone
Chengdu, Sichuan, China 610000 (the “Company”) and the undersigned (“Holder”).

 

The Company and certain
investors (including the Holder) have entered into a Securities Purchase Agreement, dated as of June __, 2019 (the “Securities
Purchase Agreement”), pursuant to which, among other things, the Holder acquired certain Common Shares (as defined in
the Securities Purchase Agreement) and Warrants (as defined in the Securities Purchase Agreement) exercisable into Warrant Shares
(as defined in the Securities Purchase Agreement). Capitalized terms not defined herein shall have the meaning as set forth in
the Securities Purchase Agreement.

 

During the period commencing
on the date hereof and ending on the fortieth (40th) calendar day after the date hereof, neither the Holder, nor any
affiliate of such Holder which (x) had or has knowledge of the transactions contemplated by the Securities Purchase Agreement,
(y) has or shares discretion relating to such Holder’s investments or trading or information concerning such Holder’s
investments, including in respect of the Securities, or (z) is subject to such Holder’s review or input concerning such affiliate’s
investments or trading (together, the “Holder’s Trading Affiliates”), collectively, shall sell, dispose
or otherwise transfer, directly or indirectly, (including, without limitation, any sales, short sales, swaps or any derivative
transactions that would be equivalent to any sales or short positions) on any Trading Day during the Restricted Period (any such
date, a “Date of Determination”), shares of common stock of the Company held by the Holder on the date hereof,
including the Common Shares and the Warrant Shares (collectively, the “Restricted Securities”), in an amount
more than [ ]%1 of the daily average composite trading volume of the Common Stock as reported by Bloomberg, LP for
the applicable Date of Determination (“Leak-Out Percentage”); provided, that the foregoing restriction shall
not apply to any actual “long” (as defined in Regulation SHO of the Securities Exchange Act of 1934, as amended) sales
by the Holder or any of the Holder’s Trading Affiliates at a price greater than $____ (in each case, as adjusted for stock
splits, stock dividends, stock combinations, recapitalizations or other similar events occurring after the date hereof).

 

 

1 Insert the Holder’s Holder Pro Rata Amount
(as defined in the Warrant) of 30%

 

    	 	 	 

     

    

 

For the purpose of
this Leak-Out Agreement, the following definitions shall apply:

 

“Affiliate”
means, with respect to any specified Person, (x) any other Person who or which, directly or indirectly, controls, is controlled
by, or is under common control with such specified Person, including, without limitation, any partner, officer, director, member
of such Person and any fund now or hereafter existing that is controlled by or under common control with one or more general partners
or managing members of, or shares the same management company with, such Person or (y) if such Person is a natural person, such
Person’s spouse, lineal descendant (including any adopted child or adopted grandchild) or other family member, or a custodian
or trustee of any trust, partnership or limited liability company for the benefit of, in whole or in part, or the ownership interests
of which are, directly or indirectly, controlled by, such Person or any other member or members of such Person’s family.

 

“Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and any governmental or any department or agency thereof.

 

Notwithstanding anything
herein to the contrary, on or after the date hereof, the Holder may, directly or indirectly, sell or transfer all, or any part,
of the Restricted Securities (or any securities convertible or exercisable into Restricted Securities, as applicable) to any Person
(an “Assignee”) without complying with (or otherwise limited by) the restrictions set forth in this Leak-Out
Agreement; provided, that as a condition to any such sale or transfer an authorized signatory of the Company and such Assignee
duly execute and deliver a leak-out agreement in the form of this Leak-Out Agreement with respect to such transferred Restricted
Securities (or such securities convertible or exercisable into Restricted Securities, as applicable) (an “Assignee Agreement”)
and sales of the Holder and its Affiliates and all Assignees shall be aggregated for all purposes of this Leak-Out Agreement and
all Assignee Agreements.

 

Any notices, consents,
waivers or other communications required or permitted to be given under the terms of this Leak-Out Agreement must be in writing.

 

This Leak-Out Agreement
constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior negotiations,
letters and understandings relating to the subject matter hereof and are fully binding on the parties hereto.

 

This Leak-Out Agreement
may be executed simultaneously in any number of counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument. This Leak-Out Agreement may be executed and accepted by facsimile or
PDF signature and any such signature shall be of the same force and effect as an original signature.

 

    	 	 	 

     

    

 

The terms of this Leak-Out
Agreement shall be binding upon and shall inure to the benefit of each of the parties hereto and their respective successors and
assigns.

 

This Leak-Out Agreement
may not be amended or modified except in writing signed by each of the parties hereto.

 

All questions concerning
the construction, validity, enforcement and interpretation of this letter agreement 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 hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of
New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is improper.

 

Each party hereby irrevocably
waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy
thereof to such party at the address for such notices to it under this letter agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. Each party hereby irrevocably waives any right it may have, and agrees not to request,
a jury trial for the adjudication of any dispute hereunder or in connection with or arising out of this letter agreement or any
transaction contemplated hereby.

 

Each party hereto acknowledges
that, in view of the uniqueness of the transactions contemplated by this letter agreement, the other parties hereto would not have
an adequate remedy at law for money damages in the event that this Leak-Out Agreement has not been performed in accordance with
its terms, and therefore agrees that such other parties shall be entitled to specific enforcement of the terms hereof in addition
to any other remedy to which it may be entitled, at law or in equity.

 

The obligations of
Holder under this Leak-Out Agreement are several and not joint with the obligations of any other holder of Securities (each, an
 “Other Holder”) under any other agreement (each, an “Other Agreement”), and Holder shall
not be responsible in any way for the performance of the obligations of any Other Holder under any such Other Agreement. Nothing
contained herein or in this Leak-Out Agreement, and no action taken by Holder pursuant hereto, shall be deemed to constitute Holder
and Other Holders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that Holder
and the Other Holders are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated
by this Leak-Out Agreement and the Company acknowledges that Holder and the Other Holders are not acting in concert or as a group
with respect to such obligations or the transactions contemplated by this Leak-Out Agreement or any Other Agreement. The Company
and Holder confirms that Holder has independently participated in the negotiation of the transactions contemplated hereby with
the advice of its own counsel and advisors. Holder shall be entitled to independently protect and enforce its rights, including,
without limitation, the rights arising out of this Leak-Out Agreement, and it shall not be necessary for any Other Holder to be
joined as an additional party in any proceeding for such purpose.

 

[Signature page follows]

 

    	 	 	 

     

    

 

[SIGNATURE PAGE TO LEAK-OUT]

 

Agreed to and Acknowledged:

 

	SENMIAO TECHNOLOGY LIMITED	 
	 	 	 
	By: 	 	 
	 	Name:	 
	 	Title:	 
	 	 	 
	[BUYER]	 
	 	 	 
	By: 	 	 
	 	Name:	 
	 	Title:Exhibit 4.2

 

DESCRIPTION OF THE COMPANY’S SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934

 

The following is a brief description of the common stock, $1.00 par value per share (the “Common Stock”), of La-Z-Boy Incorporated (the “Company”), which is the only security of the Company registered pursuant to Section 12 of the Securities Exchange Act of 1934 (the “Exchange Act”).

 

Description of Common Stock

 

General

 

The following descriptions of our Common Stock and of certain provisions of Michigan law do not purport to be complete and are subject to and qualified in their entirety by reference to our (i) restated articles of incorporation, as subsequently amended (the “Restated Articles of Incorporation” or “Restated Articles”), (ii) our amended and restated bylaws, and (iii) the Michigan Business Corporation Act (“MBCA”). Copies of our restated articles of incorporation and the three subsequent amendments to such restated articles of incorporation have been filed with the Securities and Exchange Commission (the “SEC”) as Exhibits 3.1, 3.2, 3.3 and 3.4, respectively, to our Annual Report on Form 10-K. A copy of our amended and restated bylaws have been filed with the SEC as Exhibit 3.5 to our Annual Report on Form 10-K.

 

Our common stock is listed on the New York Stock Exchange under the symbol “LZB.” The transfer agent for the Common Stock is American Stock Transfer & Trust Company.

 

Authorized Capital Stock

 

Under our Restated Articles of Incorporation, the Company is currently authorized to issue up to 150,000,000 shares of Common Stock and 5,000,000 shares of preferred stock, no par value. As of June 11, 2019, we had 46,638,907 shares of Common Stock issued and outstanding, and no shares of preferred stock issued.

 

Common Stock

 

Dividend Rights. Subject to the dividend rights of the holders of any outstanding preferred stock, the holders of shares of Common Stock are entitled to receive dividends out of assets legally available therefor at such times and in such amounts as our board of directors may from time to time declare.

 

Rights Upon Liquidation. Upon liquidation, dissolution, distribution of assets or winding up of the Company, the holders of shares of Common Stock are entitled to share ratably in our remaining assets of whatever kind available for distribution to shareholders, after distribution in full of the preferential amounts, if any, to be distributed to the holders of shares of outstanding preferred stock.

 

Conversion and Preemptive Rights. Holders of shares of our Common Stock have no conversion, preemptive or similar rights.

 

Voting Rights. Each outstanding share of Common Stock is entitled to one vote on all matters voted upon by the shareholders. Our Restated Articles of Incorporation do not provide for cumulative voting in the election of directors.

 

 

Limitations on Rights of Holders of Common Stock - Preferred Stock

 

The rights of holders of shares of Common Stock may be materially limited or qualified by the rights of holders of preferred stock that we may issue in the future. Set forth below is a description of the Company’s authority to issue preferred stock and the possible terms of that stock.

 

Our Restated Articles of Incorporation authorize our Board of Directors, without further shareholder action, to provide for the issuance of up to 5,000,000 shares of preferred stock, in one or more series, and to fix the designations, relative rights, preferences and limitations, including the dividend rate, redemption and sinking fund provisions, liquidation preferences, conversion rights, and voting rights of each of these series. We may amend from time to time our Restated Articles of Incorporation to increase the number of authorized shares of preferred stock.

 

The particular terms of any series of preferred stock that we offer may include: (i) the designation and liquidation preference per share of the preferred stock and the number of shares comprising such series; (ii) the dividend rate, the dates on which dividends will be payable, whether dividends shall be cumulative and, if so, the date from which dividends will begin to accumulate; (iii) any redemption or sinking fund provisions of the preferred stock; (iv) any conversion or exchange provisions of the preferred stock; (v) the voting rights, if any, of the preferred stock; and (vi) any additional dividend, liquidation, redemption, sinking fund and other rights, preferences, privileges, limitations and restrictions of the preferred stock.

 

Limitation of Liability

 

Our Restated Articles provide that, to the full extent authorized or permitted by the MBCA, directors of the Company will not be personally liable to the Company or its shareholders for monetary damages for breach of fiduciary duty as a director.

 

Certain Statutory, Restated Article and Amended and Restated Bylaw Provisions Affecting Shareholders

 

Certain provisions in our Restated Articles and amended and restated bylaws and the MBCA may have the effect of delaying, deferring or preventing a change of control of the Company or may operate only with respect to extraordinary corporate transactions involving the Company.

 

Business Combination Act

 

We are subject to the provisions of Chapter 7A of the MBCA, which provides that business combinations between a Michigan corporation and a beneficial owner of shares entitled to 10% or more of the voting power of such corporation generally require the affirmative vote of 90% of the votes of each class of stock entitled to vote and not less than two-thirds of each class of stock entitled to vote (excluding voting shares owned by such 10% owner). Chapter 7A defines a “business combination” to encompass any merger, consolidation, share exchange, sale of assets, stock issue, liquidation, or reclassification of securities involving an interested shareholder or certain affiliates. An “interested shareholder” is generally any person who owns 10% or more of the voting shares of the corporation. An “affiliate” is a person who directly or indirectly controls, is controlled by, or is under common control with, a specified person. Such requirements do not apply if the transaction satisfies fairness standards, other specified conditions are met and the interested shareholder has been such for at least five years.

 

 

Restated Article and Amended and Restated Bylaw Provisions

 

Our Restated Articles and amended and restated bylaws include a number of provisions that may have the effect of encouraging persons considering unsolicited tender offers or other unilateral takeover proposals to negotiate with our Board of Directors rather than pursue non-negotiated takeover attempts. These provisions include an advance notice requirement for director nominations and actions to be taken at annual meetings of shareholders, the requirements for shareholders to call a special meeting of the shareholders and the availability of authorized but unissued blank check preferred stock.

 

Advance Notice Requirement

 

Our amended and restated bylaws set forth advance notice procedures with regard to shareholder nomination of persons for election to the Board of Directors or other business to be considered at meetings of shareholders. These procedures provide that notice of such shareholder proposals must be timely given in writing to the secretary of the Company prior to the meeting at which the action is to be taken. Generally, to be timely, notice must be delivered to the secretary at the principal executive offices of the Company not less than 90 days nor more than 120 days prior to the meeting. The advance notice requirement does not give the Board of Directors any power to approve or disapprove shareholder director nominations or proposals but may have the effect of precluding the consideration of certain business at a meeting if the proper notice procedures are not followed.

 

Special Meetings of Shareholders

 

Under our amended and restated bylaws, special meetings of shareholders may be called by the chairman of our Board of Directors, our president or by the Board of Directors. It shall also be their duty to call a special meeting whenever requested to do so in writing by shareholders owning, in the aggregate, at least seventy-five percent (75%) of the entire capital stock of the Company entitled to vote at such special meeting.

 

Blank Check Preferred Stock

 

Our preferred stock could be deemed to have an anti-takeover effect in that, if a hostile takeover situation should arise, shares of preferred stock could be issued to purchasers sympathetic with our management or others in such a way as to render more difficult or to discourage a merger, tender offer, proxy contest, the assumption of control by a holder of a large block of our securities or the removal of incumbent management.

 

The effects of the issuance of one or more series of the preferred stock on the holders of our common stock could include:

 

·                  reduction of the amount otherwise available for payments of dividends on Common Stock if dividends are payable on the series of preferred stock;

·                  restrictions on dividends on our Common Stock if dividends on the series of preferred stock are in arrears;

·                  dilution of the voting power of our Common Stock if the series of preferred stock has voting rights, including a possible “veto” power if the series of preferred stock has class voting rights;

·                  dilution of the equity interest of holders of our Common Stock if the series of preferred stock is convertible, and is converted, into our Common Stock; and

·                  restrictions on the rights of holders of our Common Stock to share in our assets upon liquidation until satisfaction of any liquidation preference granted to the holders of the series of preferred stock.

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