Document:

Blueprint

 

Exhibit 4.4

 

FORM OF SERIES K COMMON STOCK PURCHASE WARRANT

 

 DROPCAR, INC.

 

	

Warrant
Shares: 1,666,666

	

 Initial
Exercise Date: November [ ] , 2018

 

THIS SERIES K COMMON STOCK PURCHASE WARRANT (the
“Warrant”)
certifies that, for value received, ALPHA CAPITAL ANSTALT or its
assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on
exercise and the conditions hereinafter set forth, at any time on
or after November [ ], 2018 (the “Initial Exercise
Date”) and until this
Warrant is exercised in full (the “Termination
Date”) but not
thereafter, to subscribe for and purchase from DropCar, Inc., a
Delaware corporation (the “Company”),
up to 1,666,666 shares (as subject to adjustment hereunder, the
“Warrant
Shares”) of Common Stock.
The purchase price of one share of Common Stock under this Warrant
shall be equal to the Exercise Price, as defined in Section
2(b).

 

Section
1.                      Definitions.
Capitalized terms used and not otherwise defined herein shall have
the meanings set forth in that certain Securities Purchase
Agreement (the “Purchase
Agreement”), dated
November 14, 2018, among the Company and the Purchaser signatory
thereto.

 

Section
2.                      Exercise.

 

a)           Exercise
of Warrant. Exercise of the
purchase rights represented by this Warrant may be made, in whole
or in part, at any time or times on or after the Initial Exercise
Date and on or before the Termination Date by delivery to the
Company (or such other office or agency of the Company as it may
designate by notice in writing to the registered Holder at the
address of the Holder appearing on the books of the Company) of a
duly executed facsimile copy (or e-mail attachment) of the Notice
of Exercise in the form annexed hereto. Within three (3) Trading
Days following the date of exercise as aforesaid, the Holder shall
deliver the aggregate Exercise Price for the shares specified in
the applicable Notice of Exercise by wire transfer or
cashier’s check drawn on a United States bank unless the
cashless exercise procedure specified in Section 2(c) below is
specified in the applicable Notice of Exercise. No ink-original
Notice of Exercise shall be required, nor shall any medallion
guarantee (or other type of guarantee or notarization) of any
Notice of Exercise form be required. Notwithstanding anything
herein to the contrary, the Holder shall not be required to
physically surrender this Warrant to the Company until the Holder
has purchased all of the Warrant Shares available hereunder and the
Warrant has been exercised in full, in which case, the Holder shall
surrender this Warrant to the Company for cancellation within three
(3) Trading Days of the date the final Notice of Exercise is
delivered to the Company. Partial exercises of this Warrant
resulting in purchases of a portion of the total number of Warrant
Shares available hereunder shall have the effect of lowering the
outstanding number of Warrant Shares purchasable hereunder in an
amount equal to the applicable number of Warrant Shares purchased.
The Holder and the Company shall maintain records showing the
number of Warrant Shares purchased and the date of such purchases.
The Company shall deliver any objection to any Notice of Exercise
within one (1) Business Day of receipt of such notice.
The Holder and any
assignee, by acceptance of this Warrant, acknowledge and agree
that, by reason of the provisions of this paragraph, following the
purchase of a portion of the Warrant Shares hereunder, the number
of Warrant Shares available for purchase hereunder at any given
time may be less than the amount stated on the face
hereof.

 

b)           Exercise
Price. The exercise price per
share of the Common Stock under this Warrant shall be $0.01,
subject to adjustment hereunder (the “Exercise
Price”).

 

c)           Cashless
Exercise. If at the time of
exercise hereof there is no effective registration statement
registering, or the prospectus contained therein is not available
for the issuance of the Warrant Shares to the Holder, then this
Warrant may be exercised, in whole or in part, at such time by
means of a “cashless exercise” in which the Holder
shall be entitled to receive a number of Warrant Shares equal to
the quotient obtained by dividing [(A-B) (X)] by (A),
where:

 

(A)
= the last VWAP immediately preceding the time of delivery of the
Notice of Exercise giving rise to the applicable “cashless
exercise” as set forth in the applicable Notice of Exercise
(to clarify, the “last VWAP” will be the last VWAP as
calculated over an entire Trading Day such that, in the event that
this Warrant is exercised at a time that the Trading Market is
open, the prior Trading Day’s VWAP shall be used in this
calculation);

 

 

1

 

 

 

(B)
= the Exercise Price of this Warrant, as adjusted hereunder;
and

 

(X)
= the number of Warrant Shares that would be issuable upon exercise
of this Warrant in accordance with the terms of this Warrant if
such exercise were by means of a cash exercise rather than a
cashless exercise.

 

If
Warrant Shares are issued in such a cashless exercise, the parties
acknowledge and agree that in accordance with Section 3(a)(9) of
the Securities Act, the Warrant Shares shall take on the registered
characteristics of the Warrants being exercised and the holding
period of the Warrant bring exercised may be tacked on to the
holding period of the Warrant Shares. The Company agrees not to
take any position contrary to this Section 2(c).

 

“VWAP”
means, for any date, the price determined by the first of the
following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted
average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is
then listed or quoted as reported by Bloomberg L.P. (based on a
Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New
York City time)), (b) if OTCQB or OTCQX is not a Trading Market,
the volume weighted average price of the Common Stock for such date
(or the nearest preceding date) on OTCQB or OTCQX as applicable,
(c) if the Common Stock is not then listed or quoted for trading on
OTCQB or OTCQX and if prices for the Common Stock are then reported
in the “Pink Sheets” published by OTC Markets Group,
Inc. (or a similar organization or agency succeeding to its
functions of reporting prices), the most recent bid price per share
of the Common Stock so reported, or (d) in all other cases, the
fair market value of a share of Common Stock as determined by an
independent appraiser selected in good faith by the Purchasers of a
majority in interest of the Securities then outstanding and
reasonably acceptable to the Company, the fees and expenses of
which shall be paid by the Company.

 

d)           Mechanics
of Exercise.

 

i.           Delivery
of Warrant Shares Upon Exercise. The Company shall cause the
Warrant Shares purchased hereunder to be transmitted by the
Transfer Agent to the Holder by crediting the account of the
Holder’s or its designee’s balance account with The
Depository Trust Company through its Deposit or Withdrawal at
Custodian system (“DWAC”) if the Company is
then a participant in such system and either (A) there is an
effective registration statement permitting the issuance of the
Warrant Shares to or resale of the Warrant Shares by Holder or (B)
this Warrant is being exercised via cashless exercise, and
otherwise by physical delivery of a certificate, registered in the
Company’s share register in the name of the Holder or its
designee, for the number of Warrant Shares to which the Holder is
entitled pursuant to such exercise to the address specified by the
Holder in the Notice of Exercise by the date that is one (1)
Trading Day after the delivery to the Company of the Notice of
Exercise (such date, the “Warrant Share Delivery
Date”). Upon delivery of the Notice of Exercise, the
Holder shall be deemed for all corporate purposes to have become
the holder of record of the Warrant Shares with respect to which
this Warrant has been exercised, irrespective of the date of
delivery of the Warrant Shares; provided that payment of the
aggregate Exercise Price (other than in the case of a Cashless
Exercise) is received within three Trading Days of delivery of the
Notice of Exercise. If the Company fails for any reason to deliver
to the Holder the Warrant Shares subject to a Notice of Exercise by
the Warrant Share Delivery Date, the Company shall pay to the
Holder, in cash, as liquidated damages and not as a penalty, for
each $1,000 of Warrant Shares subject to such exercise (based on
the VWAP of the Common Stock on the date of the applicable Notice
of Exercise), $10 per Trading Day (increasing to $20 per Trading
Day on the fifth Trading Day after such liquidated damages begin to
accrue) for each Trading Day after such Warrant Share Delivery Date
until such Warrant Shares are delivered or Holder rescinds such
exercise. The Company agrees to maintain a transfer agent that is a
participant in the FAST program so long as this Warrant remains
outstanding and exercisable.

 

 

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ii.           Delivery
of New Warrants Upon Exercise.
If this Warrant shall have been exercised in part, the Company
shall, at the request of a Holder and upon surrender of this
Warrant certificate, at the time of delivery of the Warrant Shares,
deliver to the Holder a new Warrant evidencing the rights of the
Holder to purchase the unpurchased Warrant Shares called for by
this Warrant, which new Warrant shall in all other respects be
identical with this Warrant.

 

iii.           Rescission
Rights. If the Company fails to
cause the Transfer Agent to transmit to the Holder the Warrant
Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery
Date, then the Holder will have the right to rescind such
exercise.

 

iv.           Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares Upon
Exercise. In addition to any
other rights available to the Holder, if the Company fails to cause
the Transfer Agent to transmit to the Holder the Warrant Shares in
accordance with the provisions of Section 2(d)(i) above pursuant to
an exercise on or before the Warrant Share Delivery Date, and if
after such date the Holder is required by its broker to purchase
(in an open market transaction or otherwise) or the Holder’s
brokerage firm otherwise purchases, shares of Common Stock to
deliver in satisfaction of a sale by the Holder of the Warrant
Shares which the Holder anticipated receiving upon such exercise (a
“Buy-In”),
then the Company shall (A) pay in cash to the Holder the amount, if
any, by which (x) the Holder’s total purchase price
(including brokerage commissions, if any) for the shares of Common
Stock so purchased exceeds (y) the amount obtained by multiplying
(1) the number of Warrant Shares that the Company was required to
deliver to the Holder in connection with the exercise at issue
times (2) the price at which the sell order giving rise to such
purchase obligation was executed, and (B) at the option of the
Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored
(in which case such exercise shall be deemed rescinded) or deliver
to the Holder the number of shares of Common Stock that would have
been issued had the Company timely complied with its exercise and
delivery obligations hereunder. For example, if the Holder
purchases Common Stock having a total purchase price of $11,000 to
cover a Buy-In with respect to an attempted exercise of shares of
Common Stock with an aggregate sale price giving rise to such
purchase obligation of $10,000, under clause (A) of the immediately
preceding sentence the Company shall be required to pay the Holder
$1,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the
Buy-In and, upon request of the Company, evidence of the amount of
such loss. Nothing herein shall limit a Holder’s right to
pursue any other remedies available to it hereunder, at law or in
equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the
Company’s failure to timely deliver shares of Common Stock
upon exercise of the Warrant as required pursuant to the terms
hereof.

 

v.           No
Fractional Shares or Scrip. No
fractional shares or scrip representing fractional shares shall be
issued upon the exercise of this Warrant. As to any fraction of a
share which the Holder would otherwise be entitled to purchase upon
such exercise, the Company shall, at its election, either pay a
cash adjustment in respect of such final fraction in an amount
equal to such fraction multiplied by the Exercise Price or round up
to the next whole share.

 

 

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vi.           Charges,
Taxes and Expenses. Issuance of
Warrant Shares shall be made without charge to the Holder for any
issue or transfer tax or other incidental expense in respect of the
issuance of such Warrant Shares, all of which taxes and expenses
shall be paid by the Company, and such Warrant Shares shall be
issued in the name of the Holder or in such name or names as may be
directed by the Holder; provided,
however,
that in the event that Warrant Shares are to be issued in a name
other than the name of the Holder, this Warrant when surrendered
for exercise shall be accompanied by the Assignment Form attached
hereto duly executed by the Holder and the Company may require, as
a condition thereto, the payment of a sum sufficient to reimburse
it for any transfer tax incidental thereto. The Company shall pay
all Transfer Agent fees required for same-day processing of any
Notice of Exercise and all fees to the Depository Trust Company (or
another established clearing corporation performing similar
functions) required for same-day electronic delivery of the Warrant
Shares.

 

vii.           Closing
of Books. The Company will not
close its stockholder books or records in any manner which prevents
the timely exercise of this Warrant, pursuant to the terms
hereof.

 

e)           Holder’s
Exercise Limitations. The
Company shall not effect any exercise of this Warrant, and a Holder
shall not have the right to exercise any portion of this Warrant,
pursuant to Section 2 or otherwise, to the extent that after giving
effect to such issuance after exercise as set forth on the
applicable Notice of Exercise, the Holder (together with the
Holder’s Affiliates, and any other Persons acting as a group
together with the Holder or any of the Holder’s Affiliates
(such Persons, “Attribution Parties”)), would
beneficially own in excess of the Beneficial Ownership Limitation
(as defined below). For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by the Holder
and its Affiliates and Attribution Parties shall include the number
of shares of Common Stock issuable upon exercise of this Warrant
with respect to which such determination is being made, but shall
exclude the number of shares of Common Stock which would be
issuable upon (i) exercise of the remaining, nonexercised portion
of this Warrant beneficially owned by the Holder or any of its
Affiliates or Attribution Parties and (ii) exercise or conversion
of the unexercised or nonconverted portion of any other securities
of the Company (including, without limitation, any other Common
Stock Equivalents) subject to a limitation on conversion or
exercise analogous to the limitation contained herein beneficially
owned by the Holder or any of its Affiliates or Attribution
Parties. Except as set forth in the preceding sentence, for
purposes of this Section 2(e), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to
the Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and the Holder is solely responsible for
any schedules required to be filed in accordance therewith. To the
extent that the limitation contained in this Section 2(e) applies,
the determination of whether this Warrant is exercisable (in
relation to other securities owned by the Holder together with any
Affiliates and Attribution Parties) and of which portion of this
Warrant is exercisable shall be in the sole discretion of the
Holder, and the submission of a Notice of Exercise shall be deemed
to be the Holder’s determination of whether this Warrant is
exercisable (in relation to other securities owned by the Holder
together with any Affiliates and Attribution Parties) and of which
portion of this Warrant is exercisable, in each case subject to the
Beneficial Ownership Limitation, and the Company shall have no
obligation to verify or confirm the accuracy of such determination.
In addition, a determination as to any group status as contemplated
above shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder.
For purposes of this Section 2(e), in determining the number of
outstanding shares of Common Stock, a Holder may rely on the number
of outstanding shares of Common Stock as reflected in (A) the
Company’s most recent periodic or annual report filed with
the Commission, as the case may be, (B) a more recent public
announcement by the Company or (C) a more recent written notice by
the Company or the Transfer Agent setting forth the number of
shares of Common Stock outstanding. Upon the written or oral
request of a Holder, the Company shall within two Trading Days
confirm orally and in writing to the Holder the number of shares of
Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company,
including this Warrant, by the Holder or its Affiliates or
Attribution Parties since the date as of which such number of
outstanding shares of Common Stock was reported. The
“Beneficial Ownership
Limitation” shall be
9.99% of the number of shares of the Common Stock outstanding
immediately after giving effect to the issuance of shares of Common
Stock issuable upon exercise of this Warrant. The Holder, upon
notice to the Company, may increase or decrease the Beneficial
Ownership Limitation provisions of this Section 2(e), provided that
the Beneficial Ownership Limitation in no event exceeds 9.99% of
the number of shares of the Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock upon
exercise of this Warrant held by the Holder and the provisions of
this Section 2(e) shall continue to apply. Any increase in the
Beneficial Ownership Limitation will not be effective until the
61st
day after such notice is delivered to
the Company. The provisions of this paragraph shall be construed
and implemented in a manner otherwise than in strict conformity
with the terms of this Section 2(e) to correct this paragraph (or
any portion hereof) which may be defective or inconsistent with the
intended Beneficial Ownership Limitation herein contained or to
make changes or supplements necessary or desirable to properly give
effect to such limitation. The limitations contained in this
paragraph shall apply to a successor holder of this
Warrant.

 

 

4

 

 

 

 

 

Section
3.                      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 or distributions
on shares of its Common Stock or any other equity or equity
equivalent securities payable in shares of Common Stock (which, for
avoidance of doubt, shall not include any shares of Common Stock
issued by the Company upon exercise of this Warrant), (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, subject to the limitation on
fractional shares in Section 2(d)(v). Any adjustment made pursuant
to this Section 3(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 3(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
(without regard to any limitations on exercise hereof, including
without limitation, the Beneficial Ownership Limitation)
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 (provided, however, to the extent that the
Holder’s right to participate in any such Purchase Right
would result in the Holder exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in
such Purchase Right to such extent (or beneficial ownership of such
shares of Common Stock as a result of such Purchase Right to such
extent) and such Purchase Right to such extent shall be held in
abeyance for the Holder until such time, if ever, as its right
thereto would not result in the Holder exceeding the Beneficial
Ownership Limitation).

 

c)           Pro
Rata Distributions. During such
time as this Warrant is outstanding, if the Company shall declare
or make any dividend or other distribution of its assets (or rights
to acquire its assets) to holders of shares of Common Stock, by way
of return of capital or otherwise (including, without limitation,
any distribution of cash, stock or other securities, property or
options by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction)
(other than dividends or distributions subject to Section 3(a)
herein) (a "Distribution"),
at any time after the issuance of this Warrant, then, in each such
case, the Holder shall be entitled to participate in such
Distribution to the same extent that the Holder would have
participated therein if the Holder had held the number of shares of
Common Stock acquirable upon complete exercise of this Warrant
(without regard to any limitations on exercise hereof, including
without limitation, the Beneficial Ownership Limitation)
immediately before the date of which a record is taken for such
Distribution, or, if no such record is taken, the date as of which
the record holders of shares of Common Stock are to be determined
for the participation in such Distribution (provided,
however,
to the extent that the Holder's right to participate in any such
Distribution would result in the Holder exceeding the Beneficial
Ownership Limitation, then the Holder shall not be entitled to
participate in such Distribution to such extent (or in the
beneficial ownership of any shares of Common Stock as a result of
such Distribution to such extent) and the portion of such
Distribution shall be held in abeyance for the benefit of the
Holder until such time, if ever, as its right thereto would not
result in the Holder exceeding the Beneficial Ownership
Limitation).

 

 

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d)           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, (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 (without
regard to any limitation in Section 2(e) on the exercise of this
Warrant), 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
(without regard to any limitation in Section 2(e) on the exercise
of this Warrant). 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 3(d) pursuant to written agreements in
form and substance reasonably satisfactory to the Holder and
approved by the Holder (without unreasonable delay) prior to such
Fundamental Transaction 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.

 

 

6

 

 

 

 

 

e)           Calculations.
All calculations under this Section 3 shall be made to the nearest
cent or the nearest 1/100th of a share, as the case may be. For
purposes of this Section 3, the number of shares of Common Stock
deemed to be issued and outstanding as of a given date shall be the
sum of the number of shares of Common Stock (excluding treasury
shares, if any) issued and outstanding.

 

f)           Notice
to Holder.

 

i.           Adjustment
to Exercise Price. Whenever the
Exercise Price is adjusted pursuant to any provision of this
Section 3, the Company shall promptly deliver to the Holder by
facsimile or email a notice setting forth the Exercise Price after
such adjustment and any resulting adjustment to the number of
Warrant Shares and setting forth a brief statement of the facts
requiring such adjustment.

 

ii.           Notice
to Allow Exercise by Holder. If
(A) the Company shall declare a dividend (or any other distribution
in whatever form) on the Common Stock, (B) the Company shall
declare a special nonrecurring cash dividend on or a redemption of
the Common Stock, (C) the Company shall authorize the granting to
all holders of the Common Stock rights or warrants to subscribe for
or purchase any shares of capital stock of any class or of any
rights, (D) the approval of any stockholders of the Company shall
be required in connection with any reclassification of the Common
Stock, any consolidation or merger to which the Company is a party,
any sale or transfer of all or substantially all of the assets of
the Company, or any compulsory share exchange whereby the Common
Stock is converted into other securities, cash or property, or (E)
the Company shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the
Company, then, in each case, the Company shall cause to be
delivered by facsimile or email to the Holder at its last facsimile
number or email address as it shall appear upon the Warrant
Register of the Company, at least 20 calendar days prior to the
applicable record or effective date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the
purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date as of which
the holders of the Common Stock of record to be entitled to such
dividend, distributions, redemption, rights or warrants are to be
determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer or share exchange is expected
to become effective or close, and the date as of which it is
expected that holders of the Common Stock of record shall be
entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer or share
exchange; provided that the failure to deliver such notice or any
defect therein or in the delivery thereof shall not affect the
validity of the corporate action required to be specified in such
notice. To the extent that any notice provided in this Warrant
constitutes, or contains, material, non-public information
regarding the Company or any of the Subsidiaries, the Company shall
simultaneously file such notice with the Commission pursuant to a
Current Report on Form 8-K. The Holder shall remain entitled to
exercise this Warrant during the period commencing on the date of
such notice to the effective date of the event triggering such
notice except as may otherwise be expressly set forth
herein.

 

 

7

 

 

 

 

 

Section
4.                      Transfer
of Warrant.

 

a)           Transferability.
This Warrant and all rights hereunder (including, without
limitation, any registration rights) are transferable, in whole or
in part, upon surrender of this Warrant at the principal office of
the Company or its designated agent, together with a written
assignment of this Warrant substantially in the form attached
hereto duly executed by the Holder or its agent or attorney and
funds sufficient to pay any transfer taxes payable upon the making
of such transfer. Upon such surrender and, if required, such
payment, the Company shall execute and deliver a new Warrant or
Warrants in the name of the assignee or assignees, as applicable,
and in the denomination or denominations specified in such
instrument of assignment, and shall issue to the assignor a new
Warrant evidencing the portion of this Warrant not so assigned, and
this Warrant shall promptly be cancelled. Notwithstanding anything
herein to the contrary, the Holder shall not be required to
physically surrender this Warrant to the Company unless the Holder
has assigned this Warrant in full, in which case, the Holder shall
surrender this Warrant to the Company within three (3) Trading Days
of the date the Holder delivers an assignment form to the Company
assigning this Warrant full. The Warrant, if properly assigned in
accordance herewith, may be exercised by a new holder for the
purchase of Warrant Shares without having a new Warrant
issued.

 

b)           New
Warrants. 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 4(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. All Warrants issued on transfers or exchanges shall be
dated the Issue Date and shall be identical with this Warrant
except as to the number of Warrant Shares issuable pursuant
thereto.

 

c)           Warrant
Register. The Company shall
register this Warrant, upon records to be maintained by the Company
for that purpose (the “Warrant
Register”), in the name
of the record Holder hereof from time to time. The Company may deem
and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any
distribution to the Holder, and for all other purposes, absent
actual notice to the contrary.

 

Section
5.                      Miscellaneous.

 

a)           No
Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any
voting rights, dividends or other rights as a stockholder of the
Company prior to the exercise hereof as set forth in Section
2(d)(i), except as expressly set forth in Section 3(b) and Section
3(c).

 

b)           Loss,
Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the
Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss,
theft or destruction, of indemnity or security reasonably
satisfactory to it (which, in the case of the Warrant, shall not
include the posting of any bond), and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated,
the Company will make and deliver a new Warrant or stock
certificate of like tenor and dated as of such cancellation, in
lieu of such Warrant or stock certificate.

 

c)           Saturdays,
Sundays, Holidays, etc. If the
last or appointed day for the taking of any action or the
expiration of any right required or granted herein shall not be a
Business Day, then, such action may be taken or such right may be
exercised on the next succeeding Business Day.

 

d)           Authorized
Shares.

 

The
Company covenants that, during the period the Warrant is
outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the
issuance of the Warrant Shares upon the exercise of any purchase
rights under this Warrant. The Company further covenants that its
issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of issuing the necessary
Warrant Shares upon the exercise of the purchase rights under this
Warrant. The Company will take all such reasonable action as may be
necessary to assure that such Warrant Shares may be issued as
provided herein without violation of any applicable law or
regulation, or of any requirements of the Trading Market upon which
the Common Stock may be listed. The Company covenants that all
Warrant Shares which may be issued upon the exercise of the
purchase rights represented by this Warrant will, upon exercise of
the purchase rights represented by this Warrant and payment for
such Warrant Shares in accordance herewith, be duly authorized,
validly issued, fully paid and nonassessable and free from all
taxes, liens and charges created by the Company in respect of the
issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue).

 

 

8

 

 

 

 

 

Except
and to the extent as waived or consented to by the Holder, the
Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any
of the terms of this Warrant, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of
all such actions as may be necessary or appropriate to protect the
rights of Holder as set forth in this Warrant against impairment.
Without limiting the generality of the foregoing, the Company will
(i) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to
such increase in par value, (ii) take all such action as may be
necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable Warrant Shares upon the
exercise of this Warrant and (iii) use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof, as may
be, necessary to enable the Company to perform its obligations
under this Warrant.

 

Before
taking any action which would result in an adjustment in the number
of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or
exemptions thereof, or consents thereto, as may be necessary from
any public regulatory body or bodies having jurisdiction
thereof.

 

e)           Jurisdiction.
All questions concerning the construction, validity, enforcement
and interpretation of this Warrant shall be determined in
accordance with the provisions of the Purchase
Agreement.

 

f)           Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the
exercise of this Warrant, if not registered, and the Holder does
not utilize cashless exercise, will have restrictions upon resale
imposed by state and federal securities laws.

 

g)           Nonwaiver
and Expenses. No course of
dealing or any delay or failure to exercise any right hereunder on
the part of Holder shall operate as a waiver of such right or
otherwise prejudice the Holder’s rights, powers or remedies,
notwithstanding the fact that all rights hereunder terminate on the
Termination Date. Without limiting any other provision of this
Warrant or the Purchase Agreement, if the Company willfully and
knowingly fails to comply with any provision of this Warrant, which
results in any material damages to the Holder, the Company shall
pay to the Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable
attorneys’ fees, including those of appellate proceedings,
incurred by the Holder in collecting any amounts due pursuant
hereto or in otherwise enforcing any of its rights, powers or
remedies hereunder.

 

h)           Notices.
Any notice, request or other document required or permitted to be
given or delivered to the Holder by the Company shall be delivered
in accordance with the notice provisions of the Purchase
Agreement.

 

i)           Limitation
of Liability. No provision
hereof, in the absence of any affirmative action by the Holder to
exercise this Warrant to purchase Warrant Shares, and no
enumeration herein of the rights or privileges of the Holder, shall
give rise to any liability of the 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.

 

j)           Remedies.
The Holder, in addition to being entitled to exercise all rights
granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. The Company
agrees that monetary damages would not be adequate compensation for
any loss incurred by reason of a breach by it of the provisions of
this Warrant and hereby agrees to waive and not to assert the
defense in any action for specific performance that a remedy at law
would be adequate.

 

 

9

 

 

 

 

 

k)           Successors
and Assigns. Subject to
applicable securities laws, this Warrant and the rights and
obligations evidenced hereby shall inure to the benefit of and be
binding upon the successors and permitted assigns of the Company
and the successors and permitted assigns of Holder. The provisions
of this Warrant are intended to be for the benefit of any Holder
from time to time of this Warrant and shall be enforceable by the
Holder or holder of Warrant Shares.

 

l)           Amendment.
This Warrant may be modified or amended or the provisions hereof
waived with the written consent of the Company and the
Holder.

 

m)           Severability.
Wherever possible, each provision of this Warrant shall be
interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be
prohibited by or invalid under applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provisions or the
remaining provisions of this Warrant.

 

n)           Headings.
The headings used in this Warrant are for the convenience of
reference only and shall not, for any purpose, be deemed a part of
this Warrant.

 

 

 

 

 

 

********************

 

(Signature Page Follows)

 

 

 

 

10

 

 

 

IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized as of the date first above
indicated.

 

 

 

	
 

	

DROPCAR, INC.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

By:

	
 

	
 

	
 

	
 

	

Name:
Spencer Richardson

	
 

	
 

	
 

	

Title:
Chief Executive Officer

	
 

 

 

 

 

 

 

11

 

 

 

NOTICE OF EXERCISE

 

TO:            

DROPCAR,
INC.

 

(1)
The undersigned hereby elects to purchase ________ Warrant Shares
of the Company pursuant to the terms of the attached Warrant (only
if exercised in full), and tenders herewith payment of the exercise
price in full, together with all applicable transfer taxes, if
any.

 

(2)
Payment shall take the form of (check applicable box):

 

[ ]
in lawful money of the United States; or

 

[ ]
if permitted the cancellation of such number of Warrant Shares as
is necessary, in accordance with the formula set forth in
subsection 2(c), to exercise this Warrant with respect to the
maximum number of Warrant Shares purchasable pursuant to the
cashless exercise procedure set forth in subsection
2(c).

 

(3)
Please issue said Warrant Shares in the name of the undersigned or
in such other name as is specified below:

 

____________________________________

 

 

The Warrant Shares shall be delivered to the following DWAC Account
Number:

 

____________________________________

 

____________________________________

 

____________________________________

 

 

[SIGNATURE OF HOLDER]

 

Name of Investing Entity

Signature of Authorized Signatory of Investing Entity:

Name of Authorized Signature

Title of Authorized Signatory:

Date:

 

 

 

12

 

 

 

ASSIGNMENT FORM

 

(To assign the foregoing warrant, execute

this form and supply required information.

Do not use this form to exercise the warrant.)

 

 

FOR
VALUE RECEIVED, [____] all of or [_______] shares of the foregoing
Warrant and all rights evidenced thereby are hereby assigned
to

 

 

_______________________________________________ whose address
is

 

_______________________________________________________________.

 

 

 

_______________________________________________________________

 

Dated: ______________, _______

 

 

Holder’s
Signature: _____________________________

 

Holder’s
Address: _____________________________

 

_____________________________

 

 

 

 

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.

 

 

 

13Blueprint

 

EXHIBIT 10.2

 

nFORM OF SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this
“Agreement”)
is dated as of November 14, 2018, between DropCar, Inc., a Delaware
corporation (the “Company”),
and the purchaser identified on the signature page hereto (the
“Purchaser”).

 

WHEREAS, subject to the terms and conditions set
forth in this Agreement and pursuant to an effective registration
statement under the Securities Act of 1933, as amended (the
“Securities
Act”) as to the Series K
Warrants (as defined below) and Warrant Shares (as defined below),
the Company desires to issue and sell to the Purchaser, and the
Purchaser desires to purchase from the Company, securities of the
Company as more fully described in this
Agreement.

 

NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the
receipt and adequacy of which are hereby acknowledged, the Company
and the Purchaser agree as follows:

 

ARTICLE I.

DEFINITIONS

 

1.1      Definitions.
In addition to the terms defined elsewhere in this Agreement, for
all purposes of this Agreement, the following terms have the
meanings set forth in this Section 1.1:

 

“Acquiring
Person” shall have the
meaning ascribed to such term in Section 4.5.

 

“Action”
shall have the meaning ascribed to such term in Section
3.1(j).

 

“Affiliate”
means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common
control with a Person as such terms are used in and construed under
Rule 405 under the Securities Act.

 

“Board of
Directors” means the
board of directors of the Company.

 

“Business
Day” means any day except
any Saturday, any Sunday, any day which is a federal legal holiday
in the United States or any day on which banking institutions in
the State of New York are authorized or required by law or other
governmental action to close.

 

“Closing”
means the closing of the purchase and sale of the Securities
pursuant to Section 2.1.

 

“Closing
Date” means the Trading
Day on which all of the Transaction Documents have been executed
and delivered by the applicable parties thereto, and all conditions
precedent to (i) the Purchaser’s obligation to pay the
Subscription Amount and (ii) the Company’s obligations to
deliver the Securities, in each case, have been satisfied or
waived, but in no event later than the third Trading Day following
the date hereof.

 

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

 

“Common
Stock” means the common
stock of the Company, par value $0.0001 per share, and any other
class of securities into which such securities may hereafter be
reclassified or changed.

 

“Common Stock
Equivalents” means any
securities of the Company or the Subsidiaries which would entitle
the holder thereof to acquire at any time Common Stock, including,
without limitation, any debt, preferred stock, right, option,
warrant or other instrument that is at any time convertible into or
exercisable or exchangeable for, or otherwise entitles the holder
thereof to receive, Common Stock.

 

“Company
Counsel” means Mintz,
Levin, Cohn, Ferris, Glovsky & Popeo, P.C., Chrysler Center,
666 Third Avenue, New York, New York 10017.

  

 

 

1

 

 

 

“Evaluation
Date” shall have the
meaning ascribed to such term in Section
3.1(r).

 

“Exchange
Act” means the Securities
Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

  

“FCPA”
means the Foreign Corrupt Practices Act of 1977, as
amended.

   

“GAAP”
shall have the meaning ascribed to such term in Section
3.1(h).

 

 “Indebtedness”
shall have the meaning ascribed to such term in Section
3.1(z).

 

“Intellectual Property
Rights” shall have the
meaning ascribed to such term in Section
3.1(o).

 

“Liens”
means a lien, charge, pledge, security interest, encumbrance, right
of first refusal, preemptive right or other
restriction.

 

“Material Adverse
Effect” shall have the
meaning assigned to such term in Section
3.1(b).

 

“Material
Permits” shall have the
meaning ascribed to such term in Section
3.1(m).

  

“Permitted
Indebtedness” means (i)
any accounts receivable factoring arrangement; (ii) capital lease
obligations and purchase money indebtedness of up to $400,000, in
the aggregate, incurred in connection with the acquisition of
capital assets up to the purchase price of such assets and lease
obligations with respect to newly acquired or leased assets; and
(iii) any asset-backed credit line or similar facility which
does not include the issuance of any
securities.

 

“Permitted
Lien” means the
individual and collective reference to the following: (A) Liens for
taxes, assessments and other governmental charges or levies not yet
due or Liens for taxes, assessments and other governmental charges
or levies being contested in good faith and by appropriate
proceedings for which adequate reserves (in the good faith judgment
of the management of the Company) have been established in
accordance with GAAP, (B) Liens imposed by law which were incurred
in the ordinary course of the Company’s business, such as
carriers’, warehousemen’s and mechanics’ Liens,
statutory landlords’ Liens, and other similar Liens arising
in the ordinary course of the Company’s business, and which
(x) do not individually or in the aggregate materially detract from
the value of such property or assets or materially impair the use
thereof in the operation of the business of the Company and its
consolidated Subsidiaries, or (y) are being contested in good faith
by appropriate proceedings, which proceedings have the effect of
preventing for the foreseeable future the forfeiture or sale of the
property or asset subject to such Lien, and (C) Liens incurred
prior to or subsequent to the Closing Date in connection with
Permitted Indebtedness.

 

“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.

 

“Proceeding”
means an action, claim, suit, investigation or proceeding
(including, without limitation, an informal investigation or
partial proceeding, such as a deposition), whether commenced or
threatened.

 

“Prospectus”
means the final prospectus filed for the Registration
Statement.

 

“Prospectus
Supplement” means the
supplement to the Prospectus complying with Rule 424(b) of the
Securities Act that is filed with the Commission and delivered by
the Company to the Purchaser at the Closing in connection with the
issuance of the Series K Warrants and the Warrant
Shares.

 

“Purchaser
Counsel” means Grushko
& Mittman, P.C., 515 Rockaway Avenue, Valley Stream, NY 11581,
facsimile: (212) 697–3575, e-mail:
eli@grushkomittman.com.

 

 

 

2

 

 

 

 

 “Purchaser
Party” shall have the
meaning ascribed to such term in Section 4.8.

 

“Registration
Statement” means the
effective registration statement with Commission file No.
333-227858 which registers the sale of the Series K Warrants and
the Warrant Shares to the Purchaser.

 

 “Required
Approvals” shall have the
meaning ascribed to such term in Section
3.1(e).

 

“Rule
144” means Rule 144
promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended or interpreted from time to time, or any
similar rule or regulation hereafter adopted by the Commission
having substantially the same purpose and effect as such
Rule.

 

“Rule
424” means Rule 424
promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended or interpreted from time to time, or any
similar rule or regulation hereafter adopted by the Commission
having substantially the same purpose and effect as such
Rule.

 

“SEC
Reports” shall have the
meaning ascribed to such term in Section
3.1(h).

 

“Securities”
means the Series K Warrants and the Warrant
Shares.

 

“Securities
Act” means the Securities
Act of 1933, as amended, and the rules and regulations promulgated
thereunder.

  

“Series K
Warrants” means,
collectively, the pre-funded Common Stock purchase warrants
delivered to the Purchaser at the Closing in accordance with
Sections 2.1 and 2.2(a) hereof, which Series K Warrants shall be
exercisable immediately, in the form of Exhibit
A attached
hereto.

   

“Short
Sales” means all
“short sales” as defined in Rule 200 of Regulation SHO
under the Exchange Act (but shall not be deemed to include the
location and/or reservation of borrowable shares of Common
Stock). 

 

“Subscription
Amount” means, as to the
Purchaser, the aggregate amount to be paid for the Series K
Warrants purchased hereunder as specified below the
Purchaser’s name on the signature page of this Agreement and
next to the heading “Subscription Amount,” in United
States dollars and in immediately available
funds.

 

“Subsidiary”
means any subsidiary of the Company as set forth in the SEC
Reports, and shall, where applicable, also include any direct or
indirect subsidiary of the Company formed or acquired after the
date hereof.

 

“Trading
Day” means a day on which
the principal Trading Market is open for
trading.

 

“Trading
Market” means any of the
following markets or exchanges on which the Common Stock is listed
or quoted for trading on the date in question: the NYSE MKT, the
Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global
Select Market, the New York Stock Exchange (or any successors to
any of the foregoing).

 

“Transaction
Documents” means this
Agreement, the Series K Warrants and any other documents or
agreements executed in connection with the transactions
contemplated hereunder.

 

“Transfer
Agent” means Issuer
Direct Corporation with a mailing address of 1981 Murray Holladay
Road, Suite 100, Salt Lake City, UT 84117, the current transfer
agent of the Company, and any successor transfer agent of the
Company.

 

“Transfer Agent
Instruction Letter” means
the instruction letter to the Transfer Agent in the form annexed
hereto as Exhibit B.

  

 

 

3

 

 

 

“Warrant
Shares” means the shares
of Common Stock issuable upon exercise of the Series K
Warrants.

 

ARTICLE II.

PURCHASE AND SALE

 

2.1     Closing.
On the Closing Date, upon the terms and subject to the conditions
set forth herein, the Company agrees to sell, and the Purchaser
agrees to purchase, an aggregate of $1,000,000.00 of Series K
Warrants. The Purchaser shall deliver to the clearing account
designated by the Company immediately available funds equal to the
Purchaser’s Subscription Amount as set forth on the signature
page hereto executed by the Purchaser and the Company shall deliver
to the Purchaser the Series K Warrants as determined pursuant to
Section 2.2(a), and the Company and the Purchaser shall deliver the
other items set forth in Section 2.2 deliverable at the Closing.
Upon satisfaction of the covenants and conditions set forth in
Sections 2.2 and 2.3, the Closing shall occur at the offices of
Company Counsel or such other location as the parties shall
mutually agree.

 

2.2     Deliveries.

 

(a)     On
or prior to the Closing Date, the Company shall deliver or cause to
be delivered to the Purchaser the following:

 

(i)     this
Agreement duly executed by the Company;

   

(ii)     
a Series K Warrant registered in the name of the Purchaser to
purchase up to 1,666,666 shares of Common Stock with an exercise
price of $0.01 per share, subject to adjustment
therein;

 

(iii)     the
Prospectus and Prospectus Supplement (which may be delivered in
accordance with Rule 172 under the Securities Act);
and

 

(iv)     the Transfer Agent Instruction
Letter.

 

(b)     On
or prior to the Closing Date, the Purchaser shall deliver or cause
to be delivered to the Company, as applicable, the
following:

 

(i)     this
Agreement duly executed by the Purchaser; and

 

(ii)     the
Purchaser’s Subscription Amount, which will be wired to the
account designated by the Company in writing.

 

2.3     Closing
Conditions.

 

(a)     The
obligations of the Company hereunder in connection with the
Closing, unless waived by the Company, are subject to the following
conditions being met:

 

(i)     the
accuracy in all material respects (or, to the extent
representations or warranties are qualified by materiality or
Material Adverse Effect, in all respects) when made and on the
Closing Date of the representations and warranties of the Purchaser
contained herein (unless as of a specific date therein in which
case they shall be accurate as of such date);

 

(ii)     all
obligations, covenants and agreements of the Purchaser required to
be performed at or prior to the Closing Date shall have been
performed in all material respects; and

 

(iii)     the
delivery by the Purchaser of the items set forth in Section 2.2(b)
of this Agreement.

 

 

 

4

 

 

 

(b)     The
obligations of the Purchaser hereunder in connection with the
Closing, unless waived by the Purchaser, are subject to the
following conditions being met:

 

(i)     the
accuracy in all material respects (or, to the extent
representations or warranties are qualified by materiality or
Material Adverse Effect, in all respects) when made and on the
Closing Date of the representations and warranties of the Company
contained herein (unless as of a specific date therein in which
case they shall be accurate as of such date);

 

(ii)     all
obligations, covenants and agreements of the Company required to be
performed at or prior to the Closing Date shall have been performed
in all material respects;

 

(iii)     the
delivery by the Company of the items set forth in Section 2.2(a) of
this Agreement;

 

(iv)     there
shall have been no Material Adverse Effect with respect to the
Company since the date hereof; and

 

(v)     from
the date hereof to the Closing Date, trading in the Common Stock
shall not have been suspended by the Commission or the
Company’s principal Trading Market, and, at any time from the
date hereof prior to the Closing Date, trading in securities
generally as reported by Bloomberg L.P. shall not have been
suspended or limited, or minimum prices shall not have been
established on securities whose trades are reported by such
service, or on any Trading Market, nor shall a banking moratorium
have been declared either by the United States or New York State
authorities nor shall there have occurred any material outbreak or
escalation of hostilities or other national or international
calamity of such magnitude in its effect on, or any material
adverse change in, any financial market which, in each case, in the
reasonable judgment of the Purchaser, makes it impracticable or
inadvisable to purchase the Securities at the Closing.

 

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

 

3.1     Representations
and Warranties of the Company.
Except as disclosed in the SEC Reports, the Company hereby makes
the following representations and warranties to the Purchaser as of
the Closing Date:

 

(a)     Subsidiaries.
All of the direct and indirect subsidiaries of the Company are as
disclosed in the SEC Reports. Except as set forth in the SEC
Reports, the Company owns, directly or indirectly, a majority of
the capital stock or other equity interests of each Subsidiary free
and clear of any Liens, other than Permitted Liens, subject to
restrictions under applicable laws, and all of the issued and
outstanding shares of capital stock of each Subsidiary are validly
issued and are fully paid, non-assessable and free of preemptive
and similar rights to subscribe for or purchase
securities.

 

 (b)     Organization
and Qualification. The Company
and each of the Subsidiaries is an entity duly incorporated or
otherwise organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or organization,
with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently
conducted. Neither the Company nor any Subsidiary is in violation
or default of any of the provisions of its respective certificate
or articles of incorporation, bylaws or other organizational or
charter documents. Each of the Company and the Subsidiaries is duly
qualified to conduct business and is in good standing as a foreign
corporation or other entity in each jurisdiction in which the
nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so
qualified or in good standing, as the case may be, would not have
or reasonably be expected to result in: (i) a material adverse
effect on the legality, validity or enforceability of any
Transaction Document, (ii) a material adverse effect on the results
of operations, assets, business or condition (financial or
otherwise) of the Company and the Subsidiaries, taken as a whole,
or (iii) a material adverse effect on the Company’s ability
to perform in any material respect on a timely basis its
obligations under any Transaction Document (any of (i), (ii) or
(iii), a “Material Adverse
Effect”) and no
Proceeding has been instituted in any such jurisdiction revoking,
limiting or curtailing or seeking to revoke, limit or curtail such
power and authority or qualification.

 

 

 

5

 

 

 

 

(c)     Authorization;
Enforcement. The Company has
the requisite corporate power and authority to enter into and to
consummate the transactions contemplated by this Agreement and the
other Transaction Documents and otherwise to carry out its
obligations hereunder and thereunder. The execution and delivery of
this Agreement and each of the other Transaction Documents by the
Company and the consummation by it of the transactions contemplated
hereby and thereby have been duly authorized by all necessary
action on the part of the Company and no further action is required
by the Company, the Board of Directors or the Company’s
stockholders in connection herewith or therewith other than in
connection with the Required Approvals. This Agreement and each
other Transaction Document to which it is a party has been (or upon
delivery will have been) duly executed by the Company and, when
delivered in accordance with the terms hereof and thereof, will
constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms,
except: (i) as limited by general equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited
by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by
applicable law.

 

(d)     No
Conflicts. The execution,
delivery and performance by the Company of this Agreement and the
other Transaction Documents to which it is a party, the issuance
and sale of the Securities and the consummation by it of the
transactions contemplated hereby and thereby do not and will not
(i) conflict with or violate any provision of the Company’s
or any Subsidiary’s certificate or articles of incorporation,
bylaws or other organizational or charter documents, (ii) conflict
with, or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, result in the
creation of any Lien upon any of the properties or assets of the
Company or any Subsidiary, or give to others any rights of
termination, amendment, acceleration or cancellation (with or
without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a Company or
Subsidiary debt or otherwise) or other enforceable commitment to
which the Company or any Subsidiary is a party or by which any
property or asset of the Company or any Subsidiary is bound or
affected, or (iii) subject to the Required Approvals, conflict with
or result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or
governmental authority to which the Company or a Subsidiary is
subject (including federal and state securities laws and
regulations), or by which any property or asset of the Company or a
Subsidiary is bound or affected; except in the case of each of
clauses (ii) and (iii), such as could not have or reasonably be
expected to result in a Material Adverse
Effect.

 

(e)     Filings,
Consents and Approvals. Except
as disclosed in the SEC Reports, the Company is not required to
obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with, any court or
other federal, state, local or other governmental authority or
other Person in connection with the execution, delivery and
performance by the Company of the Transaction Documents, other
than: (i) the filings required pursuant to Section 4.4 of this
Agreement, (ii) the filing with the Commission of the Prospectus
Supplement, (iii) application(s) to each applicable Trading Market
for the listing of the Warrant Shares for trading thereon in the
time and manner required thereby, (iv) the filing of Form D with
the Commission and such filings as are required to be made under
applicable state securities laws, and (v) such consents, waivers
and authorizations that shall be obtained prior to Closing
(collectively, the “Required
Approvals”).

 

 

 

6

 

 

 

 

(f)     Issuance
of the Securities; Registration. The Securities are duly authorized and, when
issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and
nonassessable, free and clear of all Liens imposed by the Company
other than restrictions on transfer provided for in the Transaction
Documents or imposed by applicable securities laws. The Warrant
Shares, when issued in accordance with the terms of the Series K
Warrants, will be validly issued, fully paid and nonassessable,
free and clear of all Liens imposed by the Company other than
restrictions on transfer provided for in the Transaction Documents
or imposed by applicable securities laws. The Company has reserved
from its duly authorized capital stock the maximum number of shares
of Common Stock for issuance of all Warrant Shares. The Company has
prepared and filed the Registration Statement in conformity with
the requirements of the Securities Act, which became effective
on November 9, 2018 (the “Effective
Date”), including the
Prospectus, and such amendments and supplements thereto as may have
been required to the date of this Agreement in connection with the
sale of the Series K Warrants and shares underlying the Series K
Warrants. The Registration Statement is effective under the
Securities Act and no stop order preventing or suspending the
effectiveness of the Registration Statement or suspending or
preventing the use of the Prospectus has been issued by the
Commission and no proceedings for that purpose have been instituted
or, to the knowledge of the Company, are threatened by the
Commission. The Company, if required by the rules and regulations
of the Commission, shall file the Prospectus with the Commission
pursuant to Rule 424(b) in relation to the sale of the Series K
Warrants and shares underlying the Series K Warrants. At the time
the Registration Statement and any amendments thereto became
effective, at the date of this Agreement and at the Closing Date,
the Registration Statement and any amendments thereto conformed and
will conform in all material respects to the requirements of the
Securities Act and did not and will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading; and the Prospectus and any amendments or
supplements thereto, at time the Prospectus or any amendment or
supplement thereto was issued and at the Closing Date, conformed
and will conform in all material respects to the requirements of
the Securities Act and did not and will not contain an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not
misleading.

 

(g)     Capitalization.
The capitalization of the Company is as set forth in the SEC
Reports. The number of shares of Common Stock issued and
outstanding as of the date hereof is 8,883,511. The Company has not issued any capital stock
since its most recently filed periodic report under the Exchange
Act, other than pursuant to the exercise of employee stock
options under the Company’s stock incentive plans, the
issuance of shares of Common Stock to employees pursuant to the
Company’s employee stock purchase plans, pursuant to the
conversion and/or exercise of Common Stock Equivalents outstanding
as of the date of the most recently filed periodic report under the
Exchange Act or as otherwise disclosed in the SEC Reports. No
Person has any right of first refusal, preemptive right, right of
participation, or any similar right to participate in the
transactions contemplated by the Transaction Documents. There are
no outstanding options, warrants, scrip rights to subscribe to,
calls or commitments of any character whatsoever relating to, or
securities, rights or obligations convertible into or exercisable
or exchangeable for, or giving any Person any right to subscribe
for or acquire, any shares of Common Stock or the capital stock of
any Subsidiary, or material contracts, commitments, understandings
or arrangements by which the Company or any Subsidiary is or may
become bound to issue additional shares of Common Stock or Common
Stock Equivalents or capital stock of any Subsidiary. The issuance
and sale of the Securities will not obligate the Company or any
Subsidiary to issue shares of Common Stock or other securities to
any Person (other than the Purchaser) and will not result in a
right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under any of such securities.
All of the outstanding shares of capital stock of the Company are
duly authorized, validly issued, fully paid and nonassessable, have
been issued in material compliance with all federal and state
securities laws, and none of such outstanding shares was issued in
violation of any preemptive rights or similar rights to subscribe
for or purchase securities. No further approval or authorization of
any stockholder, the Board of Directors or others is required for
the issuance and sale of the Securities. Except as disclosed in the
SEC Reports, there are no stockholders agreements, voting
agreements or other similar agreements with respect to the
Company’s capital stock to which the Company is a party or,
to the knowledge of the Company, between or among any of the
Company’s stockholders.

 

 

 

7

 

 

 

 

 (h)     SEC
Reports; Financial Statements.
The Company has filed all reports, schedules, forms, statements and
other documents required to be filed by the Company under the
Securities Act and the Exchange Act, including pursuant to Section
13(a) or 15(d) thereof, for the two years preceding the date hereof
(the foregoing materials, including the exhibits thereto and
documents incorporated by reference therein, and any prospectus,
prospectus supplement, amendment or supplement filed in relation
thereto, together with the Prospectus and the Prospectus
Supplement, being collectively referred to herein as the
“SEC
Reports”) on a timely
basis or has received a valid extension of such time of filing and
has filed any such SEC Reports prior to the expiration of any such
extension. As of their respective dates, the SEC Reports complied
in all material respects with the requirements of the Securities
Act and the Exchange Act, as applicable, and none of the SEC
Reports, when filed, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading. The latest audited financial statements of the Company
included in the SEC Reports comply in all material respects with
applicable accounting requirements and the rules and regulations of
the Commission with respect thereto as in effect at the time of
filing. Such financial statements have been prepared in accordance
with United States generally accepted accounting principles applied
on a consistent basis during the periods involved
(“GAAP”),
except as may be otherwise specified in such financial statements
or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP and are subject to
normal, immaterial year-end audit adjustments, and fairly present
in all material respects the financial position of the Company and
its consolidated Subsidiaries as of and for the dates thereof and
the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.

 

(i)     Material
Changes; Undisclosed Events, Liabilities or
Developments. Except as set
forth in the SEC Reports, since the date of the latest financial
statements included within the SEC Reports, (i) there has been no
event, occurrence or development that has had or that would
reasonably be expected to result in a Material Adverse Effect, (ii)
the Company has not incurred any liabilities (contingent or
otherwise) other than (A) trade payables and accrued expenses
incurred in the ordinary course of business consistent with past
practice, (B) transaction expenses incurred in connection with the
Transaction Documents, and (C) liabilities not required to be
reflected in the Company’s financial statements pursuant to
GAAP or disclosed in filings made with the Commission, (iii) the
Company has not altered its method of accounting, (iv) the Company
has not declared or made any dividend or distribution of cash or
other property to its stockholders or purchased, redeemed or made
any agreements to purchase or redeem any shares of its capital
stock and (v) the Company has not issued any equity securities to
any officer, director or Affiliate, except pursuant to existing
Company stock option plans. Except as may be set forth in the SEC
Reports, the Company does not have pending before the Commission
any request for confidential treatment of information. Except for
the issuance of the Securities contemplated by this Agreement, no
event, liability, fact, circumstance, occurrence or development has
occurred or exists or is reasonably expected to occur or exist with
respect to the Company or its Subsidiaries or their respective
businesses, properties, operations, assets or financial condition
that would be required to be disclosed by the Company under
applicable securities laws at the time this representation is made
or deemed made that has not been publicly disclosed on or prior to
the date that this representation is made.

 

 (j)     Litigation.
Except as set forth in the SEC Reports, there is no action, suit,
inquiry, notice of violation, proceeding or investigation pending
or, to the knowledge of the Company, threatened against or
affecting the Company, any Subsidiary or any of their respective
properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state,
county, local or foreign) (collectively, an
“Action”)
that would, if there were an unfavorable decision, have or
reasonably be expected to result in a Material Adverse Effect, nor
to the knowledge of the Company is there any reasonable basis for
any such Action that would, if there were an unfavorable decision,
have or reasonably be expected to result in a Material Adverse
Effect. Neither the Company nor any Subsidiary, to the
Company’s knowledge, nor any director or officer thereof, is
or has been the subject of any Action involving a claim of
violation of or liability under federal or state securities laws or
a claim of breach of fiduciary duty. There has not been, and to the
knowledge of the Company, there is not pending or contemplated, any
investigation by the Commission involving the Company or, to the
knowledge of the Company, any current or former director or officer
of the Company. The Commission has not issued any stop order or
other order suspending the effectiveness of any registration
statement filed by the Company or any Subsidiary under the Exchange
Act or the Securities Act.

 

 

 

8

 

 

 

 

(k)     Labor
Relations. No labor dispute
exists or, to the knowledge of the Company, is imminent with
respect to any of the employees of the Company, which would
reasonably be expected to result in a Material Adverse Effect.
Except as disclosed in the SEC Reports, none of the Company’s
or its Subsidiaries’ employees is a member of a union that
relates to such employee’s relationship with the Company or
such Subsidiary, and neither the Company nor any of its
Subsidiaries is a party to a collective bargaining agreement, and
the Company and its Subsidiaries believe that their relationship
with their employees, taken together, are good. To the knowledge of
the Company, no executive officer of the Company or any Subsidiary,
is, or is now expected by the Company to be, in violation of any
material term of any employment contract, confidentiality,
disclosure or proprietary information agreement or non-competition
agreement, or any other contract or agreement or any restrictive
covenant in favor of any third party which could reasonably be
expected to result in a Material Adverse Effect, and the continued
employment of each such executive officer does not subject the
Company or any of its Subsidiaries to any liability with respect to
any of the foregoing matters. The Company and its Subsidiaries are
in compliance with all applicable U.S. federal, state, local and
foreign laws and regulations relating to employment and employment
practices, terms and conditions of employment and wages and hours,
except where the failure to be in compliance would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

 

(l)     Compliance.
Neither the Company nor any Subsidiary: (i) is in default under or
in violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a
default by the Company or any Subsidiary under), nor has the
Company or any Subsidiary received notice of a claim that it is in
default under or that it is in violation of, any indenture, loan or
credit agreement or any other agreement or instrument to which it
is a party or by which it or any of its properties is bound
(whether or not such default or violation has been waived), (ii) is
in violation of any judgment, decree or order of any court,
arbitrator or other governmental authority or (iii) is or has been
in violation of any statute, rule, ordinance or regulation of any
governmental authority, including without limitation all foreign,
federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and
safety and employment and labor matters, except in each case as
would not have or reasonably be expected to result in a Material
Adverse Effect.

 

(m)     Regulatory
Permits. The Company and the
Subsidiaries possess all certificates, authorizations and permits
issued by the appropriate federal, state, local or foreign
regulatory authorities necessary to conduct their respective
businesses as actually conducted and as described in the SEC
Reports, except where the failure to possess such permits would not
reasonably be expected to result in a Material Adverse Effect
(“Material
Permits”), and neither
the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any
Material Permit.

  

(n)     Title
to Assets. The Company and the
Subsidiaries have good and marketable title in fee simple to all
real property owned by them and good and marketable title in all
tangible personal property owned by them that is material to the
business of the Company and the Subsidiaries, in each case free and
clear of all Liens, except for Permitted Liens. Any real property
and facilities held under lease by the Company and the Subsidiaries
are held by them under valid, subsisting and enforceable leases
with which the Company and the Subsidiaries are in compliance,
except where non-compliance would not reasonably be expected to
result in a Material Adverse Effect.

 

(o)     Intellectual
Property.

 

(i)

The
term “Intellectual Property Rights”
includes:

 

1.

the
name of the Company, all fictional business names, trading names,
registered and unregistered trademarks, service marks, and
applications (collectively, “Marks”);

 

2.

all
patents and patent applications (collectively,
“Patents”);

 

3.

all
copyrights in both published works and unpublished works
(collectively, “Copyrights”);

 

4.

all
rights in mask works (collectively, “Rights in Mask
Works”); and

 

5.

all
know-how, trade secrets, confidential information, customer lists,
software, technical information, data, process technology, plans,
drawings, and blue prints (collectively, “Trade
Secrets”);

 

owned,
used, or licensed by the Company as licensee or
licensor.

 

 

 

9

 

 

 

 

(ii)        Agreements.
The SEC Reports contain a complete and accurate list of all
material contracts relating to the Company’s Intellectual
Property Rights to which the Company is a party or by which the
Company is bound, except for any license implied by the sale of a
product and perpetual, paid-up licenses for commonly available
software programs with a value of less than $10,000 under which the
Company is the licensee. There are no outstanding and, to the
Company’s knowledge, no threatened disputes or disagreements
with respect to any such agreement.

 

(iii)       Know-How
Necessary for the Business. To
the Company’s knowledge: the Company’s Intellectual
Property Rights are all those necessary for the operation of the
Company’s businesses as it is currently conducted or as
represented, in writing, to the Purchaser to be conducted. To the
Company’s knowledge, the Company is the owner of all right,
title, and interest in and to each of the Intellectual Property
Rights, free and clear of all liens, security interests, charges,
encumbrances, equities, and other adverse claims, and has the right
to use all of the Intellectual Property Rights, subject in each
case to Permitted Liens. To the Company’s knowledge, no
employee of the Company has entered into any contract that
restricts or limits in any way the scope or type of work in which
the employee may be engaged or requires the employee to transfer,
assign, or disclose information concerning his work to anyone other
than of the Company.

 

(iv)       Know-How
Necessary for the Business. To
the extent the Company owns any Patents: (A) the SEC Reports
contain a complete and accurate list of all of the Company’s
Patents; (B) the Company is the owner of all right, title and
interest in and to each of the Patents, free and clear of all Liens
and other adverse claims other than Permitted Liens; (C) all of the
issued Patents are currently in compliance with formal legal
requirements (including payment of filing, examination, and
maintenance fees and proofs of working or use), are valid and
enforceable, and, except as set forth in the SEC Reports, are not
subject to any maintenance fees or taxes or actions falling due
within ninety days after the Closing Date; (D) no Patent has been
or is now involved in any interference, reissue, reexamination, or
opposition proceeding; and (E) to the Company’s knowledge:
(1) there is no potentially interfering patent or patent
application of any third party, and (2) no Patent is infringed or
has been challenged or threatened in any way. To the
Company’s knowledge, none of the products manufactured and
sold, nor any process or know-how used, by the Company infringes or
is alleged to infringe any patent or other proprietary right of any
other Person.

 

(v)       Trademarks.
To the extent the Company owns any Marks: (A) the SEC Reports
contain a complete and accurate list and summary description of all
Marks; (B) the Company is the owner of all right, title, and
interest in and to each of the Marks, free and clear of all Liens
and other adverse claims other than Permitted Liens; (C) all Marks
that have been registered with the United States Patent and
Trademark Office are currently in compliance with all formal legal
requirements (including the timely post-registration filing of
affidavits of use and incontestability and renewal applications),
are valid and enforceable, and are not subject to any maintenance
fees or taxes or actions falling due within ninety days after the
Closing Date; (D) except as set forth in the SEC Reports, no Mark
has been or is now involved in any opposition, invalidation, or
cancellation and, to the Company’s knowledge, no such action
is threatened with respect to any of the Marks and (E) to the
Company’s knowledge: (1) there is no potentially interfering
trademark or trademark application of any third party, and (2) no
Mark is infringed or has been challenged or threatened in any way.
To the Company’s knowledge, none of the Marks used by the
Company infringes or is alleged to infringe any trade name,
trademark, or service mark of any third party.

 

 

 

10

 

 

 

 

(vi)       Copyrights.
To the extent the Company owns any Copyrights: (A) the SEC Reports
contain a complete and accurate list of all Copyrights; (B) the
Company is the owner of all right, title, and interest in and to
each of the Copyrights, free and clear of all Liens and other
adverse claims other than Permitted Liens; (C) except as set forth
in the SEC Reports, all the Copyrights have been registered and are
currently in compliance with formal requirements, are valid and
enforceable, and are not subject to any maintenance fees or taxes
or actions falling due within ninety days after the date of the
Closing; (D) no Copyright is infringed or, to the
Company’s knowledge, has been challenged or threatened in any
way; (E) to the Company’s knowledge, none of the subject
matter of any of the Copyrights infringes or is alleged to infringe
any copyright of any third party or is a derivative work based on
the work of a third party; and (F) all works encompassed by
the Copyrights have been marked with the proper copyright
notice.

 

(vii)       Trade
Secrets. With respect to each
Trade Secret of the Company, the documentation relating to such
Trade Secret is current, accurate, and sufficient in detail and
content to identify and explain it and to allow its full and proper
use without reliance on the knowledge or memory of any individual.
The Company has taken all reasonable precautions to protect the
secrecy, confidentiality, and value of its Trade Secrets. The
Company has good title and an absolute (but not necessarily
exclusive) right to use the Company’s Trade Secrets subject
to Permitted Liens. The Company’s Trade Secrets are not part
of the public knowledge or literature, and, to the Company’s
knowledge, have not been used, divulged, or appropriated either for
the benefit of any Person (other than the Company) or to the
detriment of the Company. Except as set forth in the SEC Reports,
no Trade Secret of the Company is subject to any adverse claim or
has been challenged or threatened in any way.

 

(p)     Insurance.
The Company and the Subsidiaries are currently insured by insurers
of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the
businesses in which the Company and the Subsidiaries are engaged.
Neither the Company nor any Subsidiary believes that it will not be
able to acquire insurance coverage at a reasonable cost as may be
necessary to continue its business without a significant increase
in cost.

 

(q)     Transactions
With Affiliates and Employees.
Except as set forth in the SEC Reports, none of the officers or
directors of the Company or any Subsidiary and, to the knowledge of
the Company, none of the employees of the Company or any Subsidiary
is presently a party to any transaction with the Company or any
Subsidiary (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, providing for the
borrowing of money from or lending of money to or otherwise
requiring payments to or from any officer, director or such
employee or, to the knowledge of the Company, any entity in which
any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee, stockholder, member
or partner, in each case in excess of $120,000 other than for (i)
payment of salary or consulting fees for services rendered, (ii)
reimbursement for expenses incurred on behalf of the Company and
(iii) other employee benefits, including stock option agreements
under any stock or equity incentive plan of the
Company.

 

 

 

11

 

 

 

 

 (r)     Sarbanes-Oxley;
Internal Accounting Controls.
The Company and the Subsidiaries are in material compliance with
any and all applicable requirements of the Sarbanes-Oxley Act of
2002 that are effective as of the date hereof, and any and all
applicable rules and regulations promulgated by the Commission
thereunder that are effective as of the date hereof and as of the
Closing Date. The Company and the Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable
assurance that: (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP and to maintain asset
accountability, (iii) access to assets is permitted only in
accordance with management’s general or specific
authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. The
Company and the Subsidiaries have established disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the Company and the Subsidiaries and designed such
disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or
submits under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the
Commission’s rules and forms. The Company’s certifying
officers have evaluated the effectiveness of the disclosure
controls and procedures of the Company and the Subsidiaries as of
the end of the period covered by the most recently filed periodic
report under the Exchange Act (such date, the
“Evaluation
Date”). The Company
presented in its most recently filed periodic report under the
Exchange Act the conclusions of the certifying officers about the
effectiveness of the disclosure controls and procedures based on
their evaluations as of the Evaluation Date. Since the Evaluation
Date, there have been no changes in the internal control over
financial reporting (as such term is defined in the Exchange Act)
of the Company and its Subsidiaries that have materially affected,
or is reasonably likely to materially affect, the internal control
over financial reporting of the Company and its
Subsidiaries.

 

(s)     Certain
Fees. Except as set forth in
the Prospectus Supplement, no brokerage or finder’s fees or
commissions are or will be payable by the Company or any Subsidiary
to any broker, financial advisor or consultant, finder, placement
agent, investment banker, bank or other Person with respect to the
transactions contemplated by the Transaction Documents. To the
knowledge of the Company, the Purchaser shall have no obligation
with respect to any fees or with respect to any claims made by or
on behalf of other Persons for fees of a type contemplated in this
Section that may be due in connection with the transactions
contemplated by the Transaction Documents.

 

 (t)     Investment
Company. The Company is not,
and is not an Affiliate of, and immediately after receipt of
payment for the Securities, will not be or be an Affiliate of, an
“investment company” within the meaning of the
Investment Company Act of 1940, as amended. The Company shall
conduct its business in a manner so that it will not become an
“investment company” subject to registration under the
Investment Company Act of 1940, as amended.

 

(u)     Registration
Rights. No Person has any right
to cause the Company or any Subsidiary to effect the registration
under the Securities Act of any securities of the Company or any
Subsidiary.

 

(v)     Listing
and Maintenance Requirements.
The Common Stock is listed on the Nasdaq Capital Market under the
symbol “DCAR.” Except as set forth in the SEC Reports,
the Company has not, in the 12 months preceding the date hereof,
received notice from any Trading Market on which the Common Stock
is or has been listed or quoted to the effect that the Company is
not in compliance with the listing or maintenance requirements of
such Trading Market.

 

(w)    Application of
Takeover Protections. The
Company’s Board of Directors has approved the Transaction
Documents under Section 203(a)(1) of the General Corporation Law of
the State of Delaware (the “DGCL”)
in order to render the restrictions on “business
combinations” (as defined in Section 203 of the DGCL)
inapplicable to the execution, delivery or performance of the
Transaction Documents, including without limitation as a result of
the Company’s issuance of the Securities and the
Purchaser’s ownership of the Securities.

 

(x)     Disclosure.
Except with respect to the material terms and conditions of the
transactions contemplated by the Transaction Documents, the Company
confirms that neither it nor any other Person acting on its behalf
has provided the Purchaser or its agents or counsel with any
information that it believes constitutes or might constitute
material, non-public information which is not otherwise disclosed
in the Prospectus Supplement. The Company understands and confirms
that the Purchaser will rely on the foregoing representation in
effecting transactions in securities of the Company. All of the
disclosure furnished by or on behalf of the Company to the
Purchaser regarding the Company and its Subsidiaries, their
respective businesses and the transactions contemplated hereby, is
true and correct in all material respects as of the date made and
does not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
made therein, in light of the circumstances under which they were
made, not misleading. The Company acknowledges and agrees that no
Purchaser makes or has made any representations or warranties with
respect to the transactions contemplated hereby other than those
specifically set forth in Section 3.2 hereof.

 

 

 

12

 

 

 

 

(y)    
 No Integrated
Offering. Assuming the accuracy
of the Purchaser’s representations and warranties set forth
in Section 3.2, neither the Company, nor, to the knowledge of the
Company, any of its Affiliates, nor any Person acting on its or, to
the knowledge of the Company, their behalf has, directly or
indirectly, made any offers or sales of any security or solicited
any offers to buy any security, under circumstances that would
cause this offering of the Securities by the Company to be
integrated with prior offerings by the Company for purposes of (i)
the Securities Act which would require the registration of any such
securities under the Securities Act, or (ii) any applicable
shareholder approval provisions of any Trading Market on which any
of the securities of the Company are listed or
designated.

 

(z)     Solvency.
Based on the consolidated financial condition of the Company as of
the Closing Date, after giving effect to the receipt by the Company
of the proceeds from the sale of the Securities hereunder, (i) the
fair saleable value of the assets of the Company and its
Subsidiaries taken as a whole exceeds the amount that will be
required to be paid on or in respect of the Company’s
existing debts and other liabilities (including known contingent
liabilities) of the Company and its Subsidiaries as they mature,
(ii) the assets of the Company and its Subsidiaries do not
constitute unreasonably small capital to carry on its business as
now conducted and as proposed to be conducted including its capital
needs taking into account the particular capital requirements of
the business conducted by the Company and its Subsidiaries,
consolidated and projected capital requirements and capital
availability thereof, and (iii) the current cash flow of the
Company and its Subsidiaries, together with the proceeds the
Company would receive, were they to liquidate all of their assets,
after taking into account all anticipated uses of the cash, would
be sufficient to pay all amounts on or in respect of their
liabilities when such amounts are required to be paid. The Company
does not intend to incur debts beyond its ability to pay such debts
as they mature (taking into account the timing and amounts of cash
to be payable on or in respect of its debt). The SEC Reports set
forth as of the date hereof all outstanding secured and unsecured
Indebtedness of the Company or any Subsidiary, or for which the
Company or any Subsidiary has commitments. For the purposes of this
Agreement, “Indebtedness”
means (x) any liabilities for borrowed money or amounts owed in
excess of $400,000 (other than trade accounts payable incurred in
the ordinary course of business), (y) all guaranties, endorsements
and other contingent obligations in respect of indebtedness of
others, whether or not the same are or should be reflected in the
Company’s consolidated balance sheet (or the notes thereto),
except guaranties by endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary
course of business; and (z) the present value of any lease payments
in excess of $400,000 due under leases required to be capitalized
in accordance with GAAP. The Company is not in default with respect
to any Indebtedness.

 

(aa)     Tax
Status. Except as disclosed in
the SEC Reports and except for matters that would not, individually
or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect, the Company and its Subsidiaries each (i)
has made or filed all required United States federal, state and
local income and all foreign income and franchise tax returns,
reports and declarations required by any jurisdiction to which it
is subject, (ii) has paid all taxes and other governmental
assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations and
(iii) has set aside on its books provision reasonably adequate for
the payment of all material taxes for periods subsequent to the
periods to which such returns, reports or declarations apply.
Except as disclosed in the SEC Reports, there are no unpaid taxes
in any material amount claimed to be due by the taxing authority of
any jurisdiction, and the officers of the Company or of any
Subsidiary know of no reasonable basis for any such
claim.

 

(bb)     Foreign
Corrupt Practices. Neither the
Company nor any Subsidiary, nor to the knowledge of the Company or
any Subsidiary, any agent or other person acting on behalf of the
Company or any Subsidiary, has (i) directly or indirectly, used any
funds for unlawful contributions, gifts, entertainment or other
unlawful expenses related to foreign or domestic political
activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic
political parties or campaigns from corporate funds, (iii) failed
to disclose fully any contribution made by the Company or any
Subsidiary (or made by any person acting on its behalf of which the
Company is aware) which is in violation of law, or (iv) violated in
any material respect any provision of FCPA.

 

(cc)    
 Accountants.
The Company’s accounting firm is EisnerAmper LLP. To the
knowledge and belief of the Company, such accounting firm is
registered with the Public Company Accounting Oversight Board and
shall express its opinion with respect to the financial statements
to be included in the Company’s Annual Report for the fiscal
year ending December 31,
2018.     

 

 

 

13

 

 

 

 

(dd)      Acknowledgment
Regarding Purchaser’s Purchase of
Securities. The Company
acknowledges and agrees that the Purchaser is acting solely in the
capacity of an arm’s length purchaser with respect to the
Transaction Documents and the transactions contemplated thereby.
The Company further acknowledges that the Purchaser is not acting
as a financial advisor or fiduciary of the Company (or in any
similar capacity) with respect to the Transaction Documents and the
transactions contemplated thereby and any advice given by the
Purchaser or any of their respective representatives or agents in
connection with the Transaction Documents and the transactions
contemplated thereby is merely incidental to the Purchaser’s
purchase of the Securities. The Company further represents to the
Purchaser that the Company’s decision to enter into this
Agreement and the other Transaction Documents has been based solely
on the independent evaluation of the transactions contemplated
hereby by the Company and its representatives.

 

(ee)     Acknowledgement
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein
to the contrary notwithstanding (except for Sections 3.2(f) and
4.11 hereof), it is understood and acknowledged by the Company
that: (i) the Purchaser has not been asked by the Company to agree,
nor has the Purchaser agreed, to desist from purchasing or selling,
long and/or short, securities of the Company, or
“derivative” securities based on securities issued by
the Company or to hold the Securities for any specified term; (ii)
past or future open market or other transactions by the Purchaser,
specifically including, without limitation, Short Sales or
“derivative” transactions, before or after the closing
of this or future private placement transactions, may negatively
impact the market price of the Company’s publicly-traded
securities; (iii) the Purchaser, and counter-parties in
“derivative” transactions to which any the Purchaser is
a party, directly or indirectly, presently may have a
“short” position in the Common Stock, and (iv) the
Purchaser shall not be deemed to have any affiliation with or
control over any arm’s length counter-party in any
“derivative” transaction. The Company further
understands and acknowledges that (y) the Purchaser may engage in
hedging activities in accordance with all applicable laws at
various times during the period that the Securities are
outstanding, including, without limitation, during the periods that
the value of the Warrant Shares deliverable with respect to
Securities are being determined, and (z) such hedging activities
(if any) could reduce the value of the existing stockholders'
equity interests in the Company at and after the time that the
hedging activities are being conducted.  The Company
acknowledges that such aforementioned hedging activities do not
constitute a breach of any of the Transaction
Documents.

 

(ff)     Regulation
M Compliance.  The Company
has not, and to its knowledge no one acting on its behalf has, (i)
taken, directly or indirectly, any action designed to cause or to
result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of
the Securities, (ii) sold, bid for, purchased, or, paid any
compensation for soliciting purchases of, any of the Securities, or
(iii) paid or agreed to pay to any Person any compensation for
soliciting another to purchase any other securities of the Company,
other than, in the case of clauses (ii) and (iii), as set forth in
the Prospectus Supplement.

  

 (gg)     Office
of Foreign Assets Control.
Neither the company nor any Subsidiary nor, to the Company's
knowledge, any director, officer, agent, employee or affiliate of
the Company or any Subsidiary is currently subject to any U.S.
sanctions administered by the Office of Foreign Assets Control of
the U.S. Treasury Department (“OFAC”).

 

(hh)     Money
Laundering. The operations of
the Company and its Subsidiaries are and have been conducted at all
times in compliance with applicable financial record-keeping and
reporting requirements of the Currency and Foreign Transactions
Reporting Act of 1970, as amended, applicable money laundering
statutes and applicable rules and regulations thereunder
(collectively, the “Money Laundering
Laws”), and no Action,
suit or Proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any
Subsidiary with respect to the Money Laundering Laws is pending or,
to the knowledge of the Company or any Subsidiary,
threatened.

 

3.2     Representations
and Warranties of the Purchaser. The Purchaser hereby represents and warrants as
of the date hereof and as of the Closing Date to the Company as
follows (unless as of a specific date therein, in which case they
shall be accurate as of such date):

 

 

 

14

 

 

 

 

(a)      Organization;
Authority. The Purchaser is
either an individual or an entity duly incorporated or formed,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation with full right,
corporate, partnership, limited liability company or similar power
and authority to enter into and to consummate the transactions
contemplated by this Agreement and each of the other Transaction
Documents and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of the Transaction Documents
and performance by the Purchaser of the transactions contemplated
by the Transaction Documents have been duly authorized by all
necessary corporate, partnership, limited liability company or
similar action, as applicable, on the part of the Purchaser. Each
Transaction Document to which it is a party has been duly executed
by the Purchaser, and when delivered by the Purchaser in accordance
with the terms hereof, will constitute the valid and legally
binding obligation of the Purchaser, enforceable against it in
accordance with its terms, except: (i) as limited by general
equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and
(iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

 

(b)     Understandings
or Arrangements. The Purchaser
is acquiring the Securities as principal for its own account and
has no direct or indirect arrangement or understandings with any
other persons to distribute or regarding the distribution of such
Securities (this representation and warranty not limiting the
Purchaser’s right to sell the Securities pursuant to the
Registration Statement or otherwise in compliance with applicable
federal and state securities laws). The Purchaser is acquiring the
Securities hereunder in the ordinary course of its
business.

 

(c)     Purchaser
Status. At the time the
Purchaser was offered the Securities, it was, and as of the date
hereof it is, and on each date on which it exercises any Series K
Warrants, it will be either: (i) an “accredited
investor” as defined in Rule 501(a)(1), (a)(2), (a)(3),
(a)(7) or (a)(8) under the Securities Act or (ii) a
“qualified institutional buyer” as defined in Rule
144A9a) under the Securities Act. The Purchaser is not required to
be registered as a broker-dealer under Section 15 of the Exchange
Act.  

 

(d)     Experience
of the Purchaser. The
Purchaser, either alone or together with its representatives, has
such knowledge, sophistication and experience in business and
financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Securities, and has so
evaluated the merits and risks of such investment. The Purchaser is
able to bear the economic risk of an investment in the Securities
and, at the present time, is able to afford a complete loss of such
investment.

 

(e)     Access
to Information. The Purchaser
has been furnished with or has had access to the EDGAR Website of
the Commission to the Company’s filings made with the
Commission during the period from the date that is two years
preceding the date hereof through the tenth business day preceding
the Closing Date in which the Purchaser purchases Securities
hereunder, including but not limited to the Risk Factors section of
the Company’s Current Report on Form 8-K/A filed on April 2,
2018, which includes financial statements for the fiscal year
ended December 31, 2017 and the Registration Statement (referred to
collectively as the “SEC
Reports”). The Purchaser
is not deemed to have any knowledge of any information not included
in the Reports unless such information is delivered in the manner
described in the next sentence. In addition, the Purchaser may have
received in writing from the Company such other information
concerning its operations, financial condition and other matters as
the Purchaser has requested, identified thereon as OTHER WRITTEN
INFORMATION (such other information is collectively, the
“Other Written
Information”), and
considered all factors the Purchaser deems material in deciding on
the advisability of investing in the Securities. The Purchaser was
afforded (i) the opportunity to ask such questions as the Purchaser
deemed necessary of, and to receive answers from, representatives
of the Company concerning the merits and risks of acquiring the
Securities; (ii) the right of access to information about the
Company and its financial condition, results of operations,
business, properties, management and prospects sufficient to enable
the Purchaser to evaluate the Securities; and (iii) the opportunity
to obtain such additional information that the Company possesses or
can acquire without unreasonable effort or expense that is
necessary to make an informed investment decision with respect to
acquiring the Securities.

 

 

 

15

 

 

 

 

 (f)            Certain
Transactions and Confidentiality. Other than consummating the transactions
contemplated hereunder, the Purchaser has not directly or
indirectly, nor has any Person acting on behalf of or pursuant to
any understanding with such Purchaser, executed any purchases or
sales, including Short Sales, of the securities of the Company
during the period commencing as of the time that the Purchaser
first received a written term sheet of the offering from the
Company setting forth the material terms of the transactions
contemplated hereunder and ending immediately prior to the
execution hereof. Notwithstanding the foregoing, in the case of the
Purchaser that is a multi-managed investment vehicle whereby
separate portfolio managers manage separate portions of the
Purchaser’s assets and the portfolio managers have no direct
knowledge of the investment decisions made by the portfolio
managers managing other portions of the Purchaser’s assets,
the representation set forth above shall only apply with respect to
the portion of assets managed by the portfolio manager that made
the investment decision to purchase the Securities covered by this
Agreement. Other than to other Persons party to this Agreement, the
Purchaser has maintained the confidentiality of all disclosures
made to it in connection with this transaction (including the
existence and terms of this transaction). Notwithstanding the
foregoing, for avoidance of doubt, nothing contained herein shall
constitute a representation or warranty, or preclude any actions,
with respect to the identification of the availability of, or
securing of, available shares to borrow in order to effect Short
Sales or similar transactions after the Closing
Date.

 

(g)      Survival.
The foregoing representations and warranties shall survive the
Closing Date.

 

The Company acknowledges and agrees that the representations
contained in this Section 3.2 shall not modify, amend or affect the
Purchaser’s right to rely on the Company’s
representations and warranties contained in this Agreement or any
representations and warranties contained in any other Transaction
Document or any other document or instrument executed and/or
delivered in connection with this Agreement or the consummation of
the transaction contemplated hereby.

 

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

 

4.1     Transfer
Restrictions.

 

(a)     
The Securities may only be disposed of in compliance with state and
federal securities laws. In connection with any transfer of
Securities other than pursuant to an effective registration
statement or Rule 144, to the Company or to an Affiliate of a
Purchaser or in connection with a pledge as contemplated in Section
4.1(b), the Company may require the transferor thereof to provide
to the Company, at the Company’s expense, an opinion of
counsel selected by the transferor and reasonably acceptable to the
Company, the form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect that such
transfer does not require registration of such transferred
Securities under the Securities Act. As a condition of such
transfer, any such transferee shall agree in writing to be bound by
the terms of this Agreement and shall have the rights and
obligations of a Purchaser under this Agreement and the other
Transaction Documents. In connection with any transfer of
Securities made in compliance with applicable law pursuant to an
effective registration statement or Rule 144, the Company shall, at
the Company’s expense, cause its counsel to issue a legal
opinion to the Transfer Agent promptly if required by the Transfer
Agent to affect the removal of the legend.

 

(b)           The
Company acknowledges and agrees that the Purchaser may from time to
time pledge pursuant to a bona fide margin agreement with a
registered broker-dealer or grant a security interest in some or
all of the Securities to a financial institution that is an
“accredited investor” as defined in Rule 501(a) under
the Securities Act and who agrees to be bound by the provisions of
this Agreement and, if required under the terms of such
arrangement, the Purchaser may transfer pledged or secured
Securities to the pledgees or secured parties. Such a pledge or
transfer would not be subject to approval of the Company and no
legal opinion of legal counsel of the pledgee, secured party or
pledgor shall be required in connection therewith. Further, no
notice shall be required of such pledge. At the Purchaser’s
expense, the Company will execute and deliver such reasonable
documentation as a pledgee or secured party of Securities may
reasonably request in connection with a pledge or transfer of the
Securities.

 

 (c)     The
Series K Warrants and Warrant Shares shall be issued free of
legends.

 

 

 

16

 

 

 

 

4.2     Furnishing
of Information. Until the
earliest of the time that (i) the Purchaser owns no Securities,
(ii) the Series K Warrants have expired, or (iii) five years after
the Closing Date, the Company covenants to maintain the
registration of the Common Stock under Section 12(b) or 12(g) of
the Exchange Act and to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all
reports required to be filed by the Company after the date hereof
pursuant to the Exchange Act even if the Company is not then
subject to the reporting requirements of the Exchange
Act.

  

4.3     Integration.
The Company shall not sell, offer for sale or solicit offers to buy
or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the
offer or sale of the Securities for purposes of the rules and
regulations of any Trading Market such that it would require
shareholder approval prior to the closing of such other transaction
unless shareholder approval is obtained before the closing of such
subsequent transaction.

 

4.4     Securities
Laws Disclosure; Publicity. The
Company shall by 9:00 a.m. (New York City time) on the first
Trading Day immediately following the Closing Date, issue a press
release disclosing the material terms of the transactions
contemplated hereby, and shall file with the Commission a Current
Report on Form 8-K or other report, including the Transaction
Documents as exhibits thereto, within the time period required by
the Exchange Act. If the Company fails to timely make such press
release, the Purchaser shall be entitled to issue its own press
release with the same information. From and after the issuance of
such press release, the Company represents to the Purchaser that it
shall have publicly disclosed all material, non-public information
delivered to the Purchaser by the Company or any of its
Subsidiaries, or any of their respective officers, directors,
employees or agents prior to the Closing Date. The Company
understands and confirms that the Purchaser shall be relying on the
foregoing covenant in effecting transactions in securities of the
Company. The Company and the Purchaser shall consult with each
other in issuing any other press releases with respect to the
transactions contemplated hereby, and neither the Company nor the
Purchaser shall issue any such press release nor otherwise make any
such public statement without the prior consent of the Company,
with respect to any press release of the Purchaser, or without the
prior consent of the Purchaser, with respect to any press release
of the Company, which consent shall not unreasonably be withheld or
delayed, except if such disclosure is required by law, in which
case the disclosing party shall promptly provide the other party
with prior notice of such public statement or communication.
Notwithstanding the foregoing, the Company shall not publicly
disclose the name of the Purchaser, or include the name of the
Purchaser in any filing with the Commission or any regulatory
agency or Trading Market unless the name of the Purchaser is
already included in the body of the Transaction Documents, without
the prior written consent of the Purchaser, except (a) as required
by federal securities law in connection with the filing of final
Transaction Documents with the Commission and (b) to the extent
such disclosure is required by law or Trading Market regulations,
in which case the Company shall provide the Purchaser with prior
notice of such disclosure permitted under this clause
(b).

 

4.5     Shareholder
Rights Plan. No claim will be
made or enforced by the Company or, with the consent of the
Company, any other Person, that the Purchaser is an
“Acquiring
Person” under any control
share acquisition, business combination, poison pill (including any
distribution under a rights agreement) or similar anti-takeover
plan or arrangement in effect or hereafter adopted by the Company,
or that the Purchaser could be deemed to trigger the provisions of
any such plan or arrangement, by virtue of receiving Securities
under the Transaction Documents or under any other agreement
between the Company and the Purchaser.

 

4.6     Non-Public
Information. Except with
respect to the material terms and conditions of the transactions
contemplated by the Transaction Documents, the Company covenants
and agrees that neither it, nor any other Person acting on its
behalf will provide the Purchaser or its agents or counsel with any
information that constitutes, or the Company reasonably believes
constitutes, material non-public information, unless prior thereto
the Purchaser shall have entered into a written agreement with the
Company regarding the confidentiality and use of such information.
The Company understands and confirms that the Purchaser shall be
relying on the foregoing covenant in effecting transactions in
securities of the Company.

 

4.7     Use
of Proceeds. The Company will
use the net proceeds from the sale of the Securities hereunder for
general corporate purposes and working capital purposes. The
Company shall not use such proceeds: (a) for the satisfaction of
any portion of the Company’s debt (other than payment of
trade payables in the ordinary course of the Company’s
business and prior practices), (b) for the redemption of any common
stock or common stock equivalents except for any Company right of
repurchase that may be applicable to exercised stock options, (c)
for the settlement of any outstanding litigation (except for
payments pursuant to settlement agreements entered into prior to
the date hereof and disclosed in the SEC Reports or (d) in
violation of FCPA or OFAC regulations.

 

 

 

17

 

 

 

 

4.8     Indemnification
of Purchaser. Subject to the
provisions of this Section 4.8, the Company will indemnify and hold
the Purchaser and its directors, officers, shareholders, members,
partners, employees and agents (and any other Persons with a
functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title), each
Person who controls the Purchaser (within the meaning of Section 15
of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, shareholders, agents, members, partners or
employees (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding a lack of such
title or any other title) of such controlling persons (each, a
“Purchaser
Party”) harmless from any
and all losses, liabilities, obligations, claims, contingencies,
damages, costs and expenses, including all judgments, amounts paid
in settlements, court costs and reasonable attorneys’ fees
and costs of investigation that any the Purchaser Party may suffer
or incur as a result of or relating to (a) any breach of any of the
representations, warranties, covenants or agreements made by the
Company in this Agreement or in the other Transaction Documents or
(b) any action instituted against the Purchaser Parties in any
capacity, or any of them or their respective Affiliates, by any
stockholder of the Company who is not an Affiliate of the Purchaser
Party, with respect to any of the transactions contemplated by the
Transaction Documents (unless such action is based upon a breach of
the Purchaser Party’s representations, warranties or
covenants under the Transaction Documents or any agreements or
understandings the Purchaser Party may have with any such
stockholder or any violations by the Purchaser Party of state or
federal securities laws or any conduct by the Purchaser Party which
constitutes fraud, gross negligence, willful misconduct or
malfeasance). If any action shall be brought against the Purchaser
Party in respect of which indemnity may be sought pursuant to this
Agreement, the Purchaser Party shall promptly notify the Company in
writing, and the Company shall have the right to assume the defense
thereof with counsel of its own choosing reasonably acceptable to
the Purchaser Party. The Purchaser Party shall have the right to
employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be
at the expense of the Purchaser Party except to the extent that (i)
the employment thereof has been specifically authorized by the
Company in writing, (ii) the Company has failed after a reasonable
period of time to assume such defense and to employ counsel or
(iii) in such action there is, in the reasonable opinion of
counsel, a material conflict on any material issue between the
position of the Company and the position of the Purchaser Party, in
which case the Company shall be responsible for the reasonable fees
and expenses of no more than one such separate counsel. The Company
will not be liable to the Purchaser Party under this Agreement (y)
for any settlement by a Purchaser Party effected without the
Company’s prior written consent, which shall not be
unreasonably withheld or delayed; or (z) to the extent, but only to
the extent that a loss, claim, damage or liability is attributable
to the Purchaser Party’s breach of any of the
representations, warranties, covenants or agreements made by the
Purchaser Party in this Agreement or in the other Transaction
Documents or (B) any conduct by the Purchaser Party which
constitutes gross negligence or willful misconduct. The
indemnification required by this Section 4.8 shall be made by
periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or are
incurred. The indemnity agreements contained herein shall be in
addition to any cause of action or similar right of the Purchaser
Party against the Company or others and any liabilities the Company
may be subject to pursuant to law.

 

4.9     Reservation
of Common Stock. As of the date
hereof, the Company has reserved for the Purchaser and the Company
shall continue to reserve and keep available at all times, free of
preemptive rights, a sufficient number of shares of Common Stock
for the Purchaser for the purpose of enabling the Company to issue
the Warrant Shares issuable upon complete exercise of the Series K
Warrants (such amount being the “Required
Minimum”). If, on any
date, the number of authorized but unissued (and otherwise
unreserved) shares of Common Stock is less than the Required
Minimum on such date (an “Authorized Share
Failure”), then the Board
of Directors shall use commercially reasonable efforts to amend the
Company’s certificate of incorporation to increase the number
of authorized but unissued shares of Common Stock to at least the
Required Minimum at such time, as soon as possible and in any event
not later than the 60th day
after such date. Without limiting the generality of the foregoing
sentence, as soon as practicable after the date of the occurrence
of an Authorized Share Failure, but in no event later than sixty
(60) days after the occurrence of such Authorized Share Failure,
the Company shall hold a meeting of its stockholders for the
approval of an increase in the number of authorized shares of
Common Stock. In connection with such meeting, the Company shall
provide each stockholder with a proxy statement and shall use its
commercially reasonable efforts to solicit its stockholders'
approval of such increase in authorized shares of Common Stock and
to cause its board of directors to recommend to the stockholders
that they approve such proposal. Notwithstanding the foregoing, if
any such time of an Authorized Share Failure, the Company is able
to obtain the written consent of a majority of the shares of its
issued and outstanding Common Stock to approve the increase in the
number of authorized shares of Common Stock without soliciting its
stockholders, the Company may satisfy this obligation by obtaining
such consent and submitting for filing with the Commission an
Information Statement on Schedule 14C. Calculations hereunder with
reference to Warrant Shares will be made assuming exercise of the
Series K Warrants on a cash basis.

 

 

 

18

 

 

 

 

4.10     Listing
of Common Stock. The Company
hereby agrees to use commercially reasonable efforts to maintain
the listing or quotation of the Common Stock on the Trading Market
on which it is currently listed, and prior to or concurrently with
the Closing, the Company shall apply to list or quote all of the
Warrant Shares on such Trading Market and promptly secure the
listing of all of the Warrant Shares on such Trading Market prior
to Closing. The Company further agrees, if the Company applies to
have the Common Stock traded on any other Trading Market, it will
then include in such application all of the Warrant Shares, and
will take such other action as is necessary to cause all of the
Warrant Shares to be listed or quoted on such other Trading Market
as promptly as possible. The Company will then use commercially
reasonable efforts to continue the listing or quotation and trading
of its Common Stock on a Trading Market until the later of (i) the
five year anniversary of the Closing Date and (ii) the date no
Series K Warrants are outstanding and will comply in all respects
with the Company’s reporting, filing and other obligations
under the bylaws or rules of the Trading Market until such later
date.

   

4.11     Certain
Transactions and Confidentiality. The Purchaser covenants that neither it nor any
Affiliate acting on its behalf or pursuant to any understanding
with it will execute any purchases or sales, including Short Sales
of any of the Company’s securities during the period
commencing with the execution of this Agreement and ending at such
time that the transactions contemplated by this Agreement are first
publicly announced pursuant to the initial press release as
described in Section 4.4.  The Purchaser covenants that until
such time as the transactions contemplated by this Agreement are
publicly disclosed by the Company pursuant to the initial press
release as described in Section 4.4, the Purchaser will maintain
the confidentiality of the existence and terms of this
transaction.  Notwithstanding the foregoing and
notwithstanding anything contained in this Agreement to the
contrary, the Company expressly acknowledges and agrees that (i) no
Purchaser makes any representation, warranty or covenant hereby
that it will not engage in effecting transactions in any securities
of the Company after the time that the transactions contemplated by
this Agreement are first publicly announced pursuant to the initial
press release as described in Section 4.4, (ii) no Purchaser shall
be restricted or prohibited from effecting any transactions in any
securities of the Company in accordance with applicable securities
laws from and after the time that the transactions contemplated by
this Agreement are first publicly announced pursuant to the initial
press release as described in Section 4.4 and (iii) no Purchaser
shall have any duty of confidentiality or duty not to trade in the
securities of the Company to the Company or its Subsidiaries after
the issuance of the initial press release as described in Section
4.4.  Notwithstanding the foregoing, in the case of a
Purchaser that is a multi-managed investment vehicle whereby
separate portfolio managers manage separate portions of the
Purchaser’s assets and the portfolio managers have no direct
knowledge of the investment decisions made by the portfolio
managers managing other portions of the Purchaser’s assets,
the covenant set forth above shall only apply with respect to the
portion of assets managed by the portfolio manager that made the
investment decision to purchase the Securities covered by this
Agreement.

 

4.12     Exercise
Procedures. The form of
Notice of Exercise included in the Series K Warrants set forth the
totality of the procedures required of the Purchaser in order to
exercise the Series K Warrants. No additional legal opinion, other
information or instructions shall be required of the Purchaser to
exercise its Series K Warrants. Without limiting the preceding
sentences, no ink-original Notice of Exercise shall be required,
nor shall any medallion guarantee (or other type of guarantee or
notarization) of any Notice of Exercise form be required in order
to exercise the Series K Warrants. The Company shall honor
exercises of the Series K Warrants and shall deliver Warrant Shares
in accordance with the terms, conditions and time periods set forth
in the Transaction Documents.

 

4.13     Acknowledgment
of Dilution.  The Company
acknowledges that the issuance of the Securities may result in
dilution of the outstanding shares of Common Stock, which dilution
may be substantial under certain market conditions.  The
Company further acknowledges that its obligations under the
Transaction Documents, including, without limitation, its
obligation to issue the Warrant Shares pursuant to the Transaction
Documents, are unconditional and absolute and not subject to any
right of set off, counterclaim, delay or reduction, regardless of
the effect of any such dilution or any claim the Company may have
against the Purchaser and regardless of the dilutive effect that
such issuance may have on the ownership of the other stockholders
of the Company.

 

 

 

19

 

 

 

 

4.14     Form
D; Blue Sky Filings. The
Company agrees to timely file a Form D with respect to the Series K
Warrants and Warrant Shares as required under Regulation D and to
provide a copy thereof, promptly upon request of the Purchaser. The
Company shall take such action as the Company shall reasonably
determine is necessary in order to obtain an exemption for, or to
qualify the Series K Warrants and Warrant Shares for, sale to the
Purchaser at the Closing under applicable securities or “Blue
Sky” laws of the states of the United States, and shall
provide evidence of such actions promptly upon request of the
Purchaser.

  

ARTICLE V.

MISCELLANEOUS

 

5.1     Termination. 
This Agreement may be terminated by the Purchaser by written notice
to the Company if the Closing has not been consummated on or before
November 21, 2018.

 

5.2     Fees
and Expenses. Except as
expressly set forth in the Transaction Documents, each party shall
pay the fees and expenses of its advisers, counsel, accountants and
other experts, if any, and all other expenses incurred by such
party incident to the negotiation, preparation, execution, delivery
and performance of this Agreement; provided,
however,
the Company agrees to pay legal fees of $15,000 to Purchaser Counsel incurred in connection with the
negotiation, execution and delivery of the Transaction Documents.
The Company shall pay all Transfer Agent fees, stamp taxes and
other similar taxes and duties levied in connection with the
delivery of any Securities to the Purchaser.

 

5.3     Entire
Agreement. The Transaction
Documents, together with the exhibits and schedules thereto, the
Prospectus and the Prospectus Supplement, contain the entire
understanding of the parties with respect to the subject matter
hereof and thereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters,
which the parties acknowledge have been merged into such documents,
exhibits and schedules.

 

5.4     Notices.
All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally
served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable
air courier service with charges prepaid, (iv) transmitted by hand
delivery, telegram, or facsimile, or (v) transmitted via electronic
mail, in each case addressed as set forth below or to such other
address as such party shall have specified most recently by written
notice. Any notice or other communication required or permitted to
be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by
the transmitting facsimile machine, at the address or number
designated below (if delivered on a business day during normal
business hours where such notice is to be received), or the first
business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to
be received), (b) on the second business day following the date of
mailing by express courier service, fully prepaid, addressed to
such address, or upon actual receipt of such mailing, whichever
shall first occur or (c) on the date sent by e-mail of a PDF
document (with confirmation of transmission) if sent during normal
business hours of the recipient, and on the next Business Day if
sent after normal business hours of the recipient. The addresses
for such communications shall be: (i) if to the Company, to:
DropCar, Inc., 1412 Broadway, Suite 2105, New York, New York 10018,
Attn: Spencer Richardson, Chief Executive Officer, E-mail:
spencer@dropcar.com, with a copy by electronic mail only to (which
shall not constitute notice) Company Counsel, and (ii) if to the
Purchaser, to: the address and fax number indicated on the
signature page hereto, with an additional copy by electronic mail
only (which shall not constitute notice) to Purchaser
Counsel.

 

5.5     Amendments;
Waivers. No provision of this
Agreement may be waived, modified, supplemented or amended except
in a written instrument signed, in the case of an amendment, by the
Company and holders of at least a majority of the Warrant Shares
(without regard to any restriction or limitation on the exercise of
the Series K Warrants contained therein) or, in the case of a
waiver, by the party against whom enforcement of any such waived
provision is sought. No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any
subsequent default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of any party to
exercise any right hereunder in any manner impair the exercise of
any such right. Any amendment effected in accordance with
accordance with this Section 5.5 shall be binding upon the
Purchaser and holder of Securities and the
Company.

 

 

20

 

 

 

 

 

5.6     Headings.
The headings herein are for convenience only, do not constitute a
part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.

 

5.7     Successors
and Assigns. This Agreement
shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The Company may not assign
this Agreement or any rights or obligations hereunder without the
prior written consent of the Purchaser (other than by merger). The
Purchaser may assign any or all of its rights under this Agreement
to any Person to whom the Purchaser assigns or transfers any
Securities, provided that such transferee agrees in writing to be
bound, with respect to the transferred Securities, by the
provisions of the Transaction Documents that apply to the
“Purchaser.”

 

5.8     No
Third-Party Beneficiaries. This
Agreement is intended for the benefit of the parties hereto and
their respective successors and permitted assigns and is not for
the benefit of, nor may any provision hereof be enforced by, any
other Person, except as otherwise set forth in Section 4.8 and this
Section 5.8.

 

5.9     Governing
Law. All questions concerning
the construction, validity, enforcement and interpretation of the
Transaction Documents shall be governed by and construed and
enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof.
Each party agrees that all legal Proceedings concerning the
interpretations, enforcement and defense of the transactions
contemplated by this Agreement and any other Transaction Documents
(whether brought against a party hereto or its respective
affiliates, directors, officers, shareholders, partners, members,
employees or agents) shall be commenced exclusively in the state
and federal courts sitting in the City 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 (including with respect to the enforcement of any
of the Transaction Documents), and hereby irrevocably waives, and
agrees not to assert in any Action or Proceeding, any claim that it
is not personally subject to the jurisdiction of any such court,
that such Action or Proceeding is improper or is an inconvenient
venue for such Proceeding. Each party hereby irrevocably waives
personal service of process and consents to process being served in
any such Action or Proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence
of delivery) to such party at the address in effect for notices to
it under this 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 other manner permitted by
law. If any party shall commence an Action or Proceeding to enforce
any provisions of the Transaction Documents, then, in addition to
the obligations of the Company under Section 4.8, the prevailing
party in such Action or Proceeding shall be reimbursed by the
non-prevailing party for its reasonable attorneys’ fees and
other costs and expenses incurred with the investigation,
preparation and prosecution of such Action or
Proceeding.

 

5.10     Survival.
The representations and warranties contained herein shall survive
the Closing and the delivery of the Securities at the Closing for
the applicable statute of limitations.

 

5.11     Execution.
This Agreement may be executed in two or more counterparts, all of
which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been
signed by each party and delivered to each other party, it being
understood that the parties need not sign the same counterpart. In
the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a “.pdf” format data file,
such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed)
with the same force and effect as if such facsimile or
“.pdf” signature page were an original
thereof.

 

5.12     Severability.
If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their
commercially reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It
is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or
unenforceable.

 

 

21

 

 

 

 

 

5.13     Rescission
and Withdrawal Right.
Notwithstanding anything to the contrary contained in (and without
limiting any similar provisions of) any of the other Transaction
Documents, whenever the Purchaser exercises a right, election,
demand or option under a Transaction Document and the Company does
not timely perform its related obligations within the periods
therein provided, then the Purchaser may rescind or withdraw, in
its sole discretion from time to time upon written notice to the
Company, any relevant notice, demand or election in whole or in
part without prejudice to its future actions and
rights; provided, however,
that in the case of a rescission of an exercise of a Series K
Warrant, the Purchaser shall be required to return any shares of
Common Stock subject to any such rescinded exercise notice
concurrently with the return to the Purchaser of the aggregate
exercise price paid to the Company for such shares and the
restoration of the Purchaser’s right to acquire such shares
pursuant to the Purchaser’s Series K Warrant (including,
issuance of a replacement warrant certificate evidencing such
restored right).

 

5.14     Replacement
of Securities. If any
certificate or instrument evidencing any Securities is mutilated,
lost, stolen or destroyed, the Company shall issue or cause to be
issued in exchange and substitution for and upon surrender and
cancellation thereof (in the case of mutilation), or in lieu of and
substitution therefor, a new certificate or instrument, but only
upon receipt of evidence reasonably satisfactory to the Company of
such loss, theft, destruction or mutilation and of the ownership of
such Security. The applicant for a new certificate or instrument
under such circumstances shall also pay any reasonable third-party
costs (including customary indemnity) associated with the issuance
of such replacement Securities.

 

5.15     Remedies.
In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, the
Purchaser and the Company will be entitled to specific performance
under the Transaction Documents. The parties agree that monetary
damages may not be adequate compensation for any loss incurred by
reason of any breach of obligations contained in the Transaction
Documents and hereby agree to waive and not to assert in any Action
for specific performance of any such obligation the defense that a
remedy at law would be adequate.

 

5.16     Payment
Set Aside. To the extent that
the Company makes a payment or payments to the Purchaser pursuant
to any Transaction Document or a Purchaser enforces or exercises
its rights thereunder, and such payment or payments or the proceeds
of such enforcement or exercise or any part thereof are
subsequently invalidated, declared to be fraudulent or
preferential, set aside, recovered from, disgorged by or are
required to be refunded, repaid or otherwise restored to the
Company, a trustee, receiver or any other Person under any law
(including, without limitation, any bankruptcy law, state or
federal law, common law or equitable cause of action), then to the
extent of any such restoration the obligation or part thereof
originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or
such enforcement or setoff had not occurred.

 

5.17     Liquidated
Damages. The Company’s
obligations to pay any partial liquidated damages or other amounts
owing under the Transaction Documents is a continuing obligation of
the Company and shall not terminate until all unpaid partial
liquidated damages and other amounts due thereunder have been paid
notwithstanding the fact that the instrument or security pursuant
to which such partial liquidated damages or other amounts are due
and payable shall have been canceled.

 

5.18     Saturdays,
Sundays, Holidays, etc.     If the last or
appointed day for the taking of any action or the expiration of any
right required or granted herein shall not be a Business Day, then
such action may be taken or such right may be exercised on the next
succeeding Business Day.

 

5.19     Construction.
The parties agree that each of them and/or their respective counsel
have reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of the
Transaction Documents or any amendments thereto. In addition, each
and every reference to share prices and shares of Common Stock in
any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and
other similar transactions of the Common Stock that occur after the
date of this Agreement.

 

5.20     WAIVER
OF JURY TRIAL. IN
ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY
PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND
INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW,
HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY
WAIVES FOREVER TRIAL BY JURY.

 

5.21           Equitable
adjustment. Trading volume
amounts, price/volume amounts and similar figures in the
Transaction Documents shall be equitable adjusted (but without
duplication) to offset the effect of stock splits, similar events
and as otherwise described in this Agreement and the Series K
Warrants.

 

 

 

(Signature Pages Follow) 

 

 

 

 

22

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.

 

 

	

DROPCAR, INC.

 

	

Address for
Notice:

 

1412
Broadway, Suite 2105

New
York, New York 10018

E-mail:
spencer@dropcar.com

	
 

	
 

	

By:__________________________________________

     Name:
Spencer Richardson

     Title:
Chief Executive Officer

 

With a
copy to (which shall not constitute notice):

 

Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

Chrysler
Center

666
Third Avenue

New
York, New York 10017

Fax:
(212) 983-3115

Attention:
Kenneth R. Koch, Esq.; Daniel A. Bagliebter, Esq.

E-mail:
krkoch@mintz.com;
dabagliebter@mintz.com

 

	
 

	
 

	
 

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

 

23

 

 

[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE
AGREEMENT]

 

IN
WITNESS WHEREOF, the undersigned have caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.

 

Name of Purchaser: Alpha Capital Anstalt

 

Signature of Authorized Signatory of Purchaser:

 

____________________________________________________________________

 

Name of Authorized Signatory: Nicola Feuerstein

 

Title of Authorized Signatory: Director

  

Address for Notice to Purchaser and for Delivery of Securities to
Purchaser:

 

Alpha Capital Anstalt

c/o LH Financial Services Corp.

510 Madison Avenue Suite 1400

New York, NY 10022

 

Subscription Amount: $
983,332.94

 

Series K Warrant Shares (pre-funded warrants):
1,666,666

  

EIN Number, if applicable, will be provided under separate
cover

 

 

 

 

 

 

 

24

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